Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income for Period ended 30 June 2024
Consolidated Statement of Profit or Loss
Consolidated Statement of Other Comprehensive Income
Condensed Interim Statements of Financial Position As at 30 June 2024
Review of Group Performance
The Group registered revenue of S$162.2 million in 1H2024, a 60% increase as compared to S$101.7 million in 1H2023 due to higher revenue contribution from the PCS and Engineering Divisions. The Group recorded a profit before tax of S$0.4 million as compared to loss before tax of S$3.8 million in 1H2023. Both the PCS and Engineering Divisions reported a profit in 1H2024 while the ICT Division recorded a lower loss against 1H2023. The higher gross profit in 1H2024 was partially offset by higher operating and financing expenses mainly in sales and marketing as well as staff related costs to support the increase in sales activities for the PCS Division.
PCS Division recorded a revenue of S$100.1 million in 1H2024, an increase of 153% against 1H2023. Profit before tax of S$1.6 million was reported in 1H2024 as compared to a loss before tax of S$0.5 million in 1H2023.The improvement in the division's financial performance was from both its Singapore and Malaysian operations. The Malaysian operations continued to be the main profit contributor and had recorded higher profit before tax due to higher revenue recognised from the recent 4PL fulfilment and managed services contract signed with U Mobile in February 2024. The Singapore operations recorded lower losses in 1H2024 as compared to 1H2023 due to higher revenue and closure of several underperforming stores. The higher interest expenses incurred in 1H2024 was to finance the initial stocks purchased from U Mobile.
ICT Division recorded a revenue of S$31.9 million in 1H2024, a decrease of 12% against 1H2023. Despite the lower revenue, a lower loss before tax of S$1.4 million was reported in 1H2024 as compared to a loss before tax of S$2.7 million in 1H2023. This was due to higher gross margin and lower operating expenses mainly in staff related costs in 1H2024. The improvement was mainly from lower losses recorded from its Communications business. The division's loss was primarily from its Tech & Apps Services business due to its lower order book secured as well as the delay in completion of certain long term projects. This was partially mitigated by profits from its Digital Infrastructure business.
Engineering Division recorded a revenue of S$30.2 million in 1H2024, an increase of 16% against 1H2023. The increase in revenue was from both its Singapore and Indonesian operations. Profit before tax of S$0.2 million in 1H2024 was recorded as compared to a loss before tax of S$0.7 million in 1H2023. The improvement was mainly due to higher profit recognition from its operations in Indonesia and reduced losses from the Singapore operations. The Indonesian operations continued to be the main profit contributor. The improvement from the Singapore operations was largely attributed to higher revenue and higher gross margin.
The Group recorded a net cash outflow from its operating activities in 1H2024 due to negative changes in working capital. As at 30 June 2024, the Group’s net debts position was S$10.5 million due to higher bank loans secured to finance the working capital required to support the fulfilment of 4PL to U Mobile.
Prospects
The Group, having demonstrated improvements in revenue and gross profit, will continue to drive its upward trajectory. The focus will be on improving operational efficiencies, strengthening customer relationships, and capitalising on opportunities within the ICT and telecommunications industry. It will also continue to practise prudent financial management for sustainable growth. Notwithstanding the evolving landscape characterized by geopolitical tensions, and market volatility in an unpredictable macroeconomic environment, the Group believes that it is well-positioned to navigate the challenges ahead.
Segmentally, the PCS Division is poised for continued growth, with plans to enhance operations and drive expansion. In Malaysia, the Division will leverage its 4PL managed services contract with U Mobile and build on its expanded retail and distribution network for further revenue growth. In Singapore, the focus will be on optimising its retail network and delivering better customer experience and value. The ICT Division will enhance its service offerings and secure new contracts, building on its recent success from major projects secured in the hospitality, healthcare, and government sectors. The Engineering Division expects steady growth, driven by rising demand in Indonesia, its key market. It will capitalise on its strengths in network engineering and expand its product and service offerings in existing and new market segments. The Group believes that its transformation efforts are on track and will continue to drive improvements in operating and financial performance.
This release may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other companies and venues for the sale/distribution of goods and services, shifts in customer demands, customers and partners, changes in operating expenses, including employee wages, benefits and training, and governmental and public policy changes. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of management on future events.