Half Year Financial Statement And Dividend Announcement

Transcription

1 MASNET No. 42 OF Announcement No. 42 CHUAN HUP HOLDINGS LIMITED Half Year Financial Statement And Dividend Announcement PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year 1(a)(i) Income Statement for the six months ended 31 December 2002 Group S$'000 % Latest 1st half year Previous 1st half year Change Revenue 85,919 80, Cost of sales (45,379) (40,067) 13.3 Gross profit 40,540 40,904 (0.9) Direct depreciation (9,042) (7,970) 13.5 Gross profit after direct depreciation 31,498 32,934 (4.4) Other income 2,488 6,248 (60.2) Indirect depreciation (679) (711) (4.5) Sales and administrative expenses (11,097) (10,841) 2.4 Profit from operations 22,210 27,630 (19.6) Finance costs (212) (32) Profit before income tax and results of associated companies 21,998 27,598 (20.3) Share of results of associated companies 6,008 5, Profit before income tax 28,006 32,717 (14.4) Income tax (2,698) (2,409) 12.0 Profit after income tax 25,308 30,308 (16.5) Minority interests (280) (352) (20.5) Profit for the period 25,028 29,956 (16.5) 1(a)(ii) Notes to the income statement Group S$'000 % Latest 1st half Previous 1st Change Other income year half year Gain on disposal of other investment - 5,682 (100.0) Gain on disposal of plant and equipment 2, ,319.0 Foreign exchange adjustment gain (20.0) 2,488 6,248 (60.2) 1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year

2 Group Company 31/12/02 30/6/02 31/12/02 30/6/02 Current Assets $'000 $'000 $'000 $'000 Cash and cash equivalents 116, , , ,210 Marketable securities 25,213 32, Trade receivables 39,602 32, Other receivables and prepaid expenses 5,195 6,719 29,034 86,909 Inventories Work-in-progress Total Current Assets 186, , , ,341 Non-current Assets Subsidiary companies ,285 45,904 Associated companies 103, ,066 69,944 69,944 Available-for-sale investments 16,356 17,737 6,492 6,492 Property, plant and equipment 153, ,732 2,333 2,868 Other receivables and prepaid expenses , ,028 Total Non-current Assets 272, , , ,236 Total Assets 459, , , ,577 Current Liabilities Bank overdraft 836 2, Short term bank loans 35,500 34,000 29,600 34,000 Trade payables 43,358 47,073 4,080 11,001 Work-in-progress Other payables ,938 6,743 Income tax payable Current portion of long-term borrowings Total Current Liabilities 81,170 85,164 46,794 52,093 Non-current Liabilities Other payables ,542 33,687 Long-term borrowings Deferred taxation Total Non-current Liabilities ,622 33,687 Minority Interests 2,553 2, Capital and Reserves Issued capital 217, , , ,382 Reserves 157, , , ,415 Total Equity 375, , , ,797 Total Liabilities and Equity 459, , , ,577 1(b)(ii) Aggregate amount of group s borrowings and debt securities Amount repayable in one year or less, or on demand As at 31/12/2002 As at 30/6/2002 Secured Unsecured Secured Unsecured 20,000 36,335,937 1,421 36,507,853

3 Amount repayable after one year As at 31/12/2002 As at 30/6/2002 Secured Unsecured Secured Unsecured 80, Details of any collateral Nil 1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year

4 Latest 1st half year Previous 1st half year $'000 $'000 Cash flows from operating activities Profit before income tax and share of associated companies results 21,998 27,598 Adjustment for: Depreciation and amortisation 9,721 8,681 Dividend income (1,191) (999) Interest income (504) (1,416) Interest expense Gain on disposal of plant and equipment (2,106) (87) Gain on disposal of investments - (5,686) Fair value adjustments of held-for-trading marketable securities 2,774 1,085 Operating profit before working capital changes 30,904 29,208 Marketable securities (1,804) 3,634 Receivables (5,751) (8,091) Project in development Inventories Payables (4,206) 4,819 Cash generated from operations 19,891 29,605 Interest paid (212) (32) Interest received 504 1,416 Dividend received-other investment 1, Dividend received-associated companies 4,393 3,266 Income taxes paid (907) (2,315) Dividend paid (45,658) (15,713) Net cash from/(used in) operating activities (20,798) 17,226 Cash flows from investing activities Disposal of plant and equipment 4, Purchase of plant and equipment (28,570) (18,471) Acquisition of additional equity in subsidiary company - (3,778) Disposal of subsidiary company - (4) Disposal of unquoted investment 4,107 15,167 Disposal of quoted equity investments in companies Net cash used in investing activities (19,734) (6,441) Cash flows from financing activities Term loans 100 (4,544) Receivable from associated company Share repurchase (2,257) (11,253) Dividends paid to minority shareholders - (245) Proceeds from issue of shares 2, Capital reduction exercise (31) - Repayment of hire purchase liabilities (1) - Short term bank loans 1,500 11,384 Net cash from/(used in) financing activities 2,177 (3,875) Net effect of exchange rate changes in consolidation 1 51 Net increase/(decrease) in cash and cash equivalent (38,354) 6,961 Cash and cash equivalent at beginning of period 154, ,009

5 Cash and cash equivalent at end of period 116, ,970 1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year THE GROUP Consolidated statement of changes in equity for 6 months ended 31 December 2002 < Reserves > Share capital Capital Share Asset Exchange Investment Dividend Accumulated Total redemption premium fluctuation profits $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July ,382 23,890 70,688 1,781 (32,598) 1,747 45,440 73, ,608 Decrease in fair value of available-for-sale investment (3,561) - - (3,561) Currency translation arising from: Subsidiary companies Associated companies (1,950) (1,950) Net profit for the period ,028 25,028 Issue of shares 2, ,867 Repurchase of shares (1,089) 1, (2,258) (2,258) Capital reduction exercise - - (31) (31) Payment of dividends (45,440) (218) (45,658) Proposed interim tax-exempt dividend ,697 (8,697) - Balance at 31 December ,420 24,979 71,397 1,781 (34,393) (1,814) 8,697 87, ,200

6 THE GROUP Consolidated statement of changes in equity for 6 months ended 31 December 2001 < Reserves > Share capital Capital Share Asset Exchange Investment Dividend Accumulatedpro Total redemption premium fluctuation fits $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July 2001(as previously reported) 226,547 11,158 69,961 1,781 (33,587) , ,699 Reclassification of proposed dividend from liabilities to equity arising from adoption of SAS 10 - Proposed final tax-exempt dividend of $0.014 per ordinary share ,858-15,858 Prior period adjustment due to adopting of SAS ,166 - (410) 2,756 Balance at 1 July 2001(as restated) 226,547 11,158 69,961 1,781 (33,587) 3,166 15,858 95, ,313 Decrease in fair value of available-for-sale investment (1,823) (1,413) Currency translation arising from: Subsidiary companies Associated companies , ,028 Net profit for the period ,956 29,956 Issue of shares Repurchase of shares (6,457) 6, (11,253) (11,253) Overprovision of dividends due to repurchase of share capital (145) - (145) Payment of dividends (15,713) - (15,713) Proposed interim tax-exempt dividend ,817 (8,817) - Balance at 31 December ,422 17,615 70,024 1,781 (31,200) 1,343 8, , ,527

7 THE COMPANY Statement of changes in equity for 6 months ended 31 December 2002 < Reserves > Share capital Capital Share Asset Exchange Investment Dividend Accumulated Total redemption premium fluctuation profits $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July ,382 23,890 70, ,440 39, ,797 Net profit for the period ,067 14,067 Issue of shares 2, ,867 Repurchase of shares (1,089) 1, (2,258) (2,258) Payment of dividends (45,440) (218) (45,658) Proposed interim tax-exempt dividend ,697 (8,697) - Balance at 31 December ,420 24,979 70, ,697 42, ,815 THE COMPANY Statement of changes in equity for 6 months ended 31 December 2001 < Reserves > Share capital Capital Share Asset Exchange Investment Dividend Accumulated Total redemption premium fluctuation profits $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 July 2002(as previously reported) 226,547 11,158 69, , ,500 Reclassification of proposed dividend from liabilities to equity arising from adoption of SAS 10 - Proposed final tax-exempt dividend of $0.014 per ordinary share ,858-15,858 Balance at 1 July 2001(as restated) 226,547 11,158 69, ,858 43, ,358 Net profit for the period ,179 22,179 Issue of shares Repurchase of shares (6,457) 6, (11,253) (11,253) Overprovision of dividends due to repurchase of share capital (145) - (145) Payment of dividends (15,713) - (15,713) Proposed interim tax-exempt dividend ,817 (8,817) - Balance at 31 December ,422 17,615 69, ,817 45, ,821

8 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year During the period under review, the Company repurchased 5,447,000 shares by way of market acquisition for a total consideration of $2,258,276. The highest and lowest prices paid for purchases were $0.42 and $0.40 respectively. During the period under review, 452,500 shares were issued arising out of the exercise of options at $0.20 per share, 3,926,500 shares were issued arising out of the exercise of options at $0.26 per share, 6,010,000 shares were issued arising out of the exercise of options at $0.28 per share and 250,000 shares were issued arising out of the exercise of options at $0.29 per share pursuant to the Chuan Hup Employees' Share Option Scheme 1997 (the "Scheme"). As at 31 December 2002, the share capital was $217,420,490. The number of shares that may be issued on conversion of all the outstanding options by employees of the Company pursuant to the the Scheme as at 31 December 2002 are 17,500 at $0.20 per share (31 Dec 2001 : 1,817,500), 481,000 at $0.26 per share (31 Dec 2001 : 11,035,000), 1,025,000 at $0.28 per share (31 Dec 2001 : 10,875,000), NIL at $0.29 per share (31 Dec 2001 : 250,000), 110,000 at $0.425 per share (31 Dec 2001 : NIL) and 110,000 at $0.34 per share (31 Dec 2001 : NIL). 2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard) The figures have not been audited nor reviewed by the auditors. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter) 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied The Group has applied the same accounting policies and methods of computation in the financial statements for the current reporting period compared with the audited financial statements for the year ended 30 June If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change

9 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends Earnings per ordinary share for the year based on profit attributable to shareholders after deducting any provision for preference dividends:- Group Latest 1st half Previous 1st half year year (i) Based on weighted average number of ordinary shares on issue 2.31 cents 2.66 cents (ii) On a fully diluted basis 2.31 cents 2.65 cents Note to item 6(i) Group basic earnings per ordinary share is calculated by dividing Group net profit attributable to members amounting to $25,028,000 (2001: $29,956,000) by weighted average number of ordinary shares in issue during the period of 1,082,692,000 shares (2001: 1,126,123,000) after accounting for new issued and shares repurchased during the period. Note to item 6(ii) Group fully diluted earnings per ordinary share is calculated by dividing Group net profit attributable to members amounting to $25,028,000 (2001: $29,956,000) by the adjusted weighted average number of ordinary shares in issue during the period of 1,083,531,000 shares (2001: 1,132,211,000). 7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year Net asset value per ordinary share based on existing issued share capital as at the end of the period reported on. Group 31/12/02 30/6/ cents cents 8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on In line with the on-going efforts to sharpen business focus on the marine logistic services and the offshore support services, the Group has in the first half of this financial year reorganised its industry segmental reporting to this effect. Consequently, all the non-marine investment businesses were regrouped as one segment. BY INDUSTRY SEGMENTS - GROUP

10 Marine Offshore Non Marine Consolidation Logistic Support Shipbuilding Investment Elimination Total 31 December 2002 $'000 $'000 $'000 $'000 $'000 $'000 Revenue 58,865 22,173 3,069 2,052 (240) 85,919 Segment results 26,569 14, (802) - 40,540 Less: Depreciation (7,593) (3,637) (316) (221) 2,046 (9,721) 18,976 10, (1,023) 2,046 30,819 Interest expense (212) Other income 2,105 Foreign exchange adjustment gain 383 Sales and administrative expenses (11,097) (8,821 Profit before income tax and results of 21,998 associated expenses Share of results of associated companies 6,008 Profit before income tax 28,006 Marine Offshore Non Marine Consolidation Logistic Support Shipbuilding Investment Elimination Total 31 December 2001 $'000 $'000 $'000 $'000 $'000 $'000 Revenue 53,565 18,142 5,256 4,008-80,971 Segment results 26,678 11,027 1,297 1,902-40,904 Less: Depreciation (6,942) (3,157) (334) (221) 1,973 (8,681) 19,736 7, ,681 1,973 32,223 Interest expense (32) Other income 5,769 Foreign exchange adjustment gain 479 Sales and administrative expenses (10,841) (4,625) Profit before income tax and results of associated expenses Share of results of associated companies 5,119 Profit before income tax 32,717 For the six months ended 31 December 2002, the Group recorded revenue of $86 million and net profit after tax of $25 million. Compared to the previous corresponding period, revenue was higher by 6%, but net profit was lower by 16%. Correspondingly, earnings per share were 2.31 cents compared to 2.65 cents. The drop in net profit was mainly due to a one off divestment gain of $5.7 million recorded in the previous period. Had the divestment gain been excluded, the results for the two six months periods would have been comparable. Revenue The Group's core business activities of offshore support services and the marine logistics and transportation services continued to generate the bulk of the Group's revenue. For the six months ended December 2002, both business activities recorded higher revenue accounting for $80.8 million or 94% of total revenue against $71.7 million or 89% for the previous corresponding period. Other investments, such as the aluminium shipbuilding activities, dividends, interest and other non-core investments contributed the balance of the revenue. 27,598

11 Of the total core marine revenue, offshore support services to the oil and gas industry contributed about 27% while marine logistics and transportation about 73% this first half. The breakdown for the previous corresponding period was 25% and 75% respectively. Revenue from aluminium shipbuilding and shipyard operations decreased from $5.3 million to $3.1 million. This was expected as the Group's 50% shipbuilding joint venture is only fulfilling the delivery of its remaining orders and has not taken on any new jobs. Gross profit Group gross profit was relatively unchanged between the two six month periods at about $40 million. Group profit margin for the core marine business was narrower for the six months ended December 2002 compared to the previous corresponding period as a result of higher operating cost contributed mainly by higher fuel prices in the marine logistics and transportation division. On the other hand, the offshore support services achieved better margin because of lower repair and maintenance expenses as well as earnings from two new AHTS vessels during the period as compared to the previous corresponding period. Gross margin for the Group was also dragged down by a provision of $2.7 million for marking down the value of short-term investments to market this half. Depreciation Depreciation expense for the Group increased to $9 million in the first six month compared to $8 million for the corresponding period. This was the result of additional vessels added to the fleet. Other income For the six months ended December 2002, other income was down significantly by 60% compared to the corresponding period, from $6.2 million to $2.5 million. This was primarily due to a one off divestment gain of $5.7 million recorded in the previous period. Share of results of associated companies The results from associated companies were generally better this reporting six months compared to the corresponding period, increasing from $5.1 million to $6 million. The main contributors were the contract manufacturing associate, PCI and the Australian property associates, which contributed about $2.4 million and $2.1 million respectively. Income tax The Group income tax expense increased slightly by about $0.3 million mainly due to higher income from associated companies that were taxable. Financial position As at 31 December 2002, the financial position of the Company and the Group remained strong and healthy. Operating cash flow during the period remained positive. As of the same date, the Group had cash and cash equivalents of $117 million. It should be noted that during the six months from 30 June 2002 to 31 December 2002, the Group made dividend payment of $46 million to shareholders and capital expenditure of $28 million for vessels purchases. As a result of the substantial payout of dividend to our shareholders, the net tangible assets per share decreased to 34.5 cents compared to 37 cents six months ago. Dividend The directors have declared and approved an interim dividend of 4% (tax-exempt) on the Company's ordinary shares each of 20 cents par value, in respect of the six months period ended 31 December

12 2002. Therefore, shareholders will receive 0.8 of one cent per ordinary share they own, or $8 per 1000 shares. 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results 10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months Like most businesses today, the Company and the Group will continue to face uncertainties and challenges in the next few months. With the Geo.-political tensions and uncertainties emanating from the Iraqi crisis in the Middle East, no one can be certain of the outcome of the conflict and its ramifications. But the directors also recognise that opportunities may exist in such situations and will stand ready to take advantage of such possibilities. The reorganisation of the Group's marine business into two distinct operations, namely the offshore support services to the oil and gas industry and the marine logistics and transportation of coal and aggregates has been completed with the public listing of CH Offshore Ltd on the SGX Mainboard on 28 February The Group now owns 63% of CHO and hence earnings from the offshore support services division will now be diluted to the extent of 37% starting from the second half of financial year ending June Save as disclosed herein, there are no material factors or events which may affect the earnings of the Group between this date up to which the report refers and the date on which the report was issued.

13 11. Dividend (a) Current Financial Period Reported On Any dividend recommended for the current financial period reported on? Yes Name of Dividend Interim Dividend Type Cash Dividend Rate 4 % per ordinary share (tax exempt) Par value of shares $0.20 Tax Rate (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? Yes Name of Dividend Interim Dividend Type Cash Dividend Rate 4 % per ordinary share (tax exempt) Par value of shares $0.20 Tax Rate (c) Date payable 10 April (d) Books closure date Notice is hereby given that the Share Transfer Books and Register of Members will be closed on 28 March 2003 for the preparation of dividend warrants. Duly completed transfers received by the Company's Registrar, Barbinder & Co Pte Ltd, 8 Cross Street #11-00, PWC Building, Singapore up to 5.00 p.m. on 27 March 2003 will be registered to determine the shareholders' entitlements to the dividends. In respect of shares in securities accounts with the CDP, the said dividend will be paid by the Company to the CDP which will in turn distribute entitlements to such holders of shares in accordance with its practice. 12. If no dividend has been declared/recommended, a statement to that effect

14 PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT (This part is not applicable to Q1, Q2, Q3 or Half Year Results) 13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding year 14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments 15. A breakdown of sales 16. A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details) Ordinary Preference Total: Latest Full Year () Previous Full Year () 17. Comparative figures Certain reclassification have been made to the comparative figures in the financial statement to conform with their current year's presentation. BY ORDER OF THE BOARD Valerie Tan Company Secretary 07/03/2003