Second Quarter Results Financial Statement And Related Announcement
Financials Archive
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Unaudited Consolidated Income Statement
for three months and half year ended 30 June 2010
Unaudited Consolidated Statement Of Comprehensive Income
Balance Sheets
Review Of Performance
Income Statement Analysis
Three months ended 30 June 2010
The Group's revenue increased by $1.4 million or 4% to $34.1 million in 2Q 2010 as compared to $32.7 million in 2Q 2009 due largely to increased contribution from downstream segment.
The Group's gross profit increased by 27% to $13.2 million in 2Q 2010 compared with 2Q 2009. The higher gross profit was attributable to better contribution from the membrane & engineering and downstream segments. Gross margin improved for all segments.
Other income increased by $1.3 million or 54% to $3.6 million in 2Q 2010 mainly attributable to higher interest income arising from a loan repaid.
Finance cost reduced by 50% to $0.5 million as a result of full repayment of the convertible loan notes, partially offset by new bank borrowings in the year.
Profit before income tax increased by $3.9 million or 52% from $7.4 million in 2Q 2009 to $11.3 million in 2Q 2010.
Half year ended 30 June 2010
The Group's revenue increased by $12.9 million or 24% year-on-year from $53.7 million in 1H 2009 to $66.6 million in 1H 2010. This was mainly due to increased revenue from downstream segment.
Gross profit increased by $6.7 million or 40% from $16.8 million in 1H 2009 to $23.5 million in 1H 2010 mainly attributable to higher contribution from all business segments.
Other income increased by $0.9 million or 19% to $5.6 million in 1H 2010 mainly due to the increase in interest income. The increase was partially offset by the decrease of government grants.
Administrative expenses increased by $2.4 million or 28%, which was mainly due to increased staff and R&D costs.
Profit before tax increased 45% to $19.1 million mainly due to better contribution from both membrane process & engineering and downstream segments.
Statements of Financial Position Analysis
Financial receivables increased by 19% to $121.4m as at 30 June 2010 due to more BOT projects having been completed.
Trade receivables increased by $3.1 million to $30.1 million as at 30 June 2010 in line with the increase of revenue.
Other receivables and prepayments increased by $1.3 million or 3% from $38.6 million to $39.9 million mainly due to increased prepaid purchase, offset by reduction in loan to third parties.
Inventories increased by $ 4.5 million or 21% from $21.7 million to $26.2 million, in particular from the membrane process & engineering segment.
Trade payables increased by $7.7 million or 23% from $ 32.8 million to $40.5 million mainly due to an increase in the amount of advance receipt from customers in the membrane process & engineering segment.
Other payables and accrued expenses increased by $3.2 million or 22% from $14.8 million to $18.0 million mainly due to receipt of progressive payment from the disposal of subsidiary, Jiangxi New Reyphon Biochemical Co. Ltd and payables arising from acquisition of a water plant.
Statement of Cash flows
The Group generated positive net cash from operating activities of S$17.5 million for 6 months ended 30 June 2010, a decrease from $23.1 million a year ago. This was mainly due to more cash outflow from working capital requirement. However, the decrease was partially offset by more cash inflow from higher profit.
There was a net cash outflow of $14.3 million in 2Q 2010 from investing activities, mainly for financing water projects and acquisition of property, plant and equipment.
Financing activities resulted in positive cash flow of S$10.3 million mainly due to new bank loan raised of $17.9 million.
Cash and cash equivalents stood at $52.4m as at 30 June 2010.
Commentary On Current Year Prospects
According to industry estimates, the Chinese government is expected to double its budget for environmental protection and water resource development to approximately US$450 billion for 2011 to 2015 from US$219 billion for 2006 to 2010.
We are well placed to expand our business in the water segment.
Our listed subsidiary, Reyphon Agriceutical Limited, entered into an agreement to dispose the entire interest in its subsidiary, Jiangxi New Reyphon Biochemical Co. Ltd, in June 2010. Subject to approval from the shareholders of Reyphon Agriceutical Limited, this transaction is scheduled to be completed in September 2010.
Going forward, we will continue to focus efforts and explore the platform for growth organically or with strategic partners in this sector and related businesses.