Investor Relations - News

Half Year Financial Statement

Half Year Financial Statements on consolidated results for the six months ended 30 September 2002.
These figures have not been audited.

-	-	Group			Company
-	-	S$'000		%	S$'000		%
-	-
-	-	30/9/2002	30/9/2001	Increase/ (Decrease)	30/9/2002	30/9/2001	Increase/ (Decrease)
1.(a)	Turnover	23,213	21,292	9.0	2,943	1,681	75.1
1.(b)	Cost of sales (Note A)	(15,390)	(13,723)	12.1	0	0	NM
1.(c)	Gross profit	7,823	7,569	3.4	2,943	1,681	75.1
1.(d)	Investment income	0	0	NM	0	0	NM
1.(e)	Other income including interest income	229	145	57.9	2	27	(92.6)
2.(a)	Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	1,806	1,560	15.8	1,377	373	269.2
2.(b)(i)	Interest on borrowings	(249)	(183)	36.1	0	(12)	NM
2.(b)(ii)	Depreciation and amortisation	(405)	(475)	(14.7)	(218)	(344)	(36.6)
2.(b)(iii)	Foreign exchange gain/(loss)	305	(87)	NM	(23)	(10)	130.0
2.(c)	Exceptional items (provide separate disclosure of items)	2,799	(217)	NM	(593)	(1,404)	(57.8)
-	-
-	-	S$'000		%	S$'000		%
-	-
-	-	30/9/2002	30/9/2001	Increase/ (Decrease)	30/9/2002	30/9/2001	Increase/ (Decrease)
2.(d)	Operating profit/(loss) before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items	4,256	598	611.7	543	(1,397)	NM
2.(e)	Income derived from associated companies (With separate disclosure of any items included therein which are exceptional because of size & incidence)	0	0	NM	0	0	NM
2.(f)	Operating profit before income tax	4,256	598	611.7	543	(1,397)	NM
2.(g)	Less income tax (Indicate basis of computation)	(235)	(442)	(46.8)	(301)	0	NM
2.(g)(i)	Operating profit/(loss) after tax before deducting minority interests	4,021	156	2,477.6	242	(1,397)	NM
2.(g)(ii)	Less minority interests	(185)	79	NM	0	0	NM
2.(h)	Operating profit/(loss) after tax attributable to members of the company	3,836	235	1,532.3	242	(1,397)	NM
2.(i)(i)	Extraordinary items (provide separate disclosure of items)	0	0	NM	0	0	NM
2.(i)(ii)	Less minority interests	0	0	NM	0	0	NM
2.(i)(iii)	Extraordinary items attributable to members of the company	0	0	NM	0	0	NM

Note A - Depreciation of property, plant and equipment for the Group amounting to S$0.77m (2001: S$0.48m) has been included in the cost of sales.

Note B to Item 2(g) - Income Tax is computed based on liability method.

-	-	Group			Company
-	-	S$'000		%	S$'000		%
-	-
-	-	30/9/2002	30/9/2001	Increase/ (Decrease)	30/9/2002	30/9/2001	Increase/ (Decrease)
2.(i)(iv)	Transfer to/from Exchange Reserve	0	0	NM	0	0	NM
2.(i)(v)	Transfer to Capital Reserve	0	0	NM	0	0	NM
2.(i)(vi)	Transfer to Reserve Fund	0	0	NM	0	0	NM
2.(j)	Operating profit/(loss) after tax and extraordinary items attributable to members of the company	3,836	235	1,532.3	242	(1,397)	NM

NM: not meaningful

Group Figures
-	-	Latest period	Previous corresponding period
3.(a)	Operating profit/(loss) [2(g)(i) above] as a percentage of turnover [1(a) above]	17.32%	0.73%
3.(b)	Operating profit [2(h) above] as a percentage of issued capital and reserves at end of the period	12.68%	0.88%
3.(c)	Earnings per ordinary share for the period based on 2(h) above after deducting any provision for preference dividends:-
	(i) Based on weighted average number of ordinary shares in issue	4.84 cents	0.30 cents
	(ii) On a fully diluted basis (To disclose the basis used in arriving at the weighted average number of shares for the purposes of (c)(i) above and to provide details of any adjustments made for the purpose of (c)(ii) above)	4.83 cents	0.29 cents
3.(d)	Net tangible asset backing per ordinary share based on existing issued share capital as at the end of the period reported on	36.33 cents	33.64 cents

3.(e) To provide an analysis of expenses based on their nature within the group for

the current and previous corresponding period

Cost of sales incurred for the current first half rose generally in tandem with the increase in turnover. Competition experienced in securing a few major jobs in the oilfield operations had, however, exerted a downward pressure on the margins, thereby pushing the increase in costs (12%) slightly higher than the growth in turnover (9%).

Positive exchange movements in the Group's key operating currencies translated into a foreign exchange gain of S$0.31m as compared to foreign exchange loss of S$0.09m for prior comparative period.

Staff costs and other operating expenses (excluding exceptional items) remained comparable to those incurred in prior comparative period.

Note C to Item 3(c)(i) - The earnings per share based on existing share capital is calculated on the profit set out in 2(h) above and the weighted average number of ordinary shares in issue of 79.20m (YTD September 2001: 79.20m) during the period under review.

Note D to Item 3(c)(ii) - The earnings per share on a fully diluted basis is calculated on the profit set out in 2(h) above and the weighted average number of ordinary shares of 79.36m (YTD September 2001: 79.97m) in issue during the period under review (adjusted for the effects of dilutive potential ordinary shares being the share options granted to employees).

-	-	Group			Company
Item 4 is not applicable to interim results		S$'000		%	S$'000		%
-	-
-	-	30/9/2002	30/9/2001	Increase/ (Decrease)	30/9/2002	30/9/2001	Increase/ (Decrease)
4.(a)	Sales reported for first half year
4.(b)	Operating profit [2(g)(i) above] reported for first half year
4.(c)	Sales reported for second half year
4.(d)	Operating profit [2(g)(i) above] reported for second half year

5.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years

Under provision of the Group's prior year's current taxation amounted to S$29,400.

5.(b) Amount of any pre-acquisition profits

NIL

5.(c) Amount of profits on any sale of investments and/or properties

Item 5c Table

Sale of investments/properties	$Profit/(Loss)
Profit on sale of leasehold property	$1,117,654.00

5.(d) Any other comments relating to Paragraph 5

NIL

6. Segmental Results

 

BY INDUSTRY SEGMENTS 30 September 2002	Marine & Oilfield	Turbocharger & Fuel Injection	Trading	Foundry	Subsea Robotics	Eliminations	Group
	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000
Revenue
External sales	9,342	9,697	-	-	4,174	-	23,213
Inter-segment sales	-	-	-	-	-	-	-
Total sales	9,342	9,697	-	-	4,174	-	23,213
Segment results	2,917	582	39	(40)	781	226	4,505
Finance costs							(249)
Taxation							(235)
Minority interest							(185)
Net profit attributable to shareholders							3,836
Assets and Liabilities
Segment assets	24,070	14,286	5,912	(98)	15,495	(4,639)	55,026
Tax recoverable							129
Total assets							55,155
Segment liabilities	(3,518)	(3,374)	(326)	(4)	(4,146)	-	(11,368)
Provision for taxation							-
Deferred taxation							(90)
Bank borrowings							(12,239)
Finance lease payables							(111)
Total liabilities							(23,808)
Other segmental information
Capital expenditure	559	380	-	-	4,077	-	5,016
Depreciation	459	151	-	8	539	6	1,163
Other non-cash income/(expenses)	2,890	(76)	-	-	-	-	2,814

BY GEOGRAPHICAL SEGMENTS	Singapore	Australia	Malaysia	United Kingdom	Total
30 September 2002	S$'000	S$'000	S$'000	S$'000	S$'000
External sales	9,365	9,697	-	4,151	23,213
Segment assets	33,361	9,630	(98)	12,133	55,026
Capital expenditure	4,475	380	-	161	5,016

BY INDUSTRY SEGMENTS 30 September 2001	Marine & Oilfield	Turbocharger & Fuel Injection	Trading	Foundry	SubseaRobotics	Eliminations	Group
	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000
Revenue
External sales	12,473	7,333	-	449	1,037	-	21,292
Inter-segment sales	519	-	-	75	-	(594)	-
Total sales	12,992	7,333	-	524	1,037	(594)	21,292
Segment results	748	537	804	(430)	(258)	(620)	781
Finance costs							(183)
Taxation							(442)
Minority interest							79
Net profit attributable to shareholders							235
Assets and Liabilities
Segment assets	18,518	10,818	11,095	226	7,247	(5,109)	42,795
Tax recoverable							-
Total assets							42,795
Segment liabilities	(5,005)	(1,895)	(709)	(56)	(2,014)	507	(9,172)
Provision for taxation							(538)
Deferred taxation							-
Bank borrowings							(5,274)
Finance lease payables							(214)
Total liabilities							(15,198)
Other segmental information
Capital expenditure	146	120	-	-	5,005	-	5,271
Depreciation	717	116	-	51	168	(95)	957
Other non-cash income/(expenses)	2	-	898	91	-	(919)	72




BY GEOGRAPHICAL SEGMENTS	Singapore	Australia	Malaysia	United Kingdom	Total
30 September 2001	S$'000	S$'000	S$'000	S$'000	S$'000
External sales	12,473	7,333	449	1,037	21,292
Segment assets	32,503	6,385	226	3,681	42,795
Capital expenditure	2,406	120	-	2,745	5,271

7.(a) Review of the performance of the company and its principal subsidiaries

The Group's turnover for the current first half edged up 9% above prior year's comparative first half, generating a turnover of S$23.21m.

The growth was led mainly by contributions from the subsea robotics division with its enlarged fleet of 6 remotely operated vehicles ("ROVs"). The Group also enjoyed maiden revenue from the newly acquired fuel injection business in Australia, which further improved the turnover. The overall improvement in turnover was, however, moderated by lower revenue from marine repair services division following its disposal in May 2002.

Correspondingly, the Group's performance for the current first half was a marked improvement over the comparative period. Group operating profit before tax, minority interests and exceptional items was S$1.46m, way surpassing the S$0.82m achieved over the comparative half year, and already accomplishing 76% of the S$1.91m operating profit registered for the entire financial year ended 31 March 2002.

The current first half saw the subsea robotics division benefiting from the deployment of four new additions to its existing fleet, being two new Super Mohawks ROVs and two heavy work-class Phoenix ROVs. The industry outlook in its key market places, notably the North Sea, West Africa and SE Asia, is also encouraging.

The turbocharger division continued to deliver good margins through its firm market leadership in Australia's independent turbocharger service industry. The performance of the Australian unit was further boosted with the acquisition of a fuel injection business in August 2002.

The oilfield division also enjoyed buoyant sales albeit the competition encountered in securing a few major jobs and thus, the concomitant pressure on job margins.

The absence of losses suffered by the discontinued marine repairs services and foundry business also played a principal role in hastening the improvement.

Apart from operational fronts, the exceptional gain of S$3.48m arising from successful completion of divesting the Group's marine repair services business and a property at Gul Drive in May 2002 also had a favourable impact on the current half year's overall performance. This was offset by a provision of S$0.68m for diminution in value of an investment.

7.(b) Where a forecast, or a prospect statement, has been previously disclosed to shareholders,

the issuer must explain any variance between the forecast or prospect statement and the
actual results

The Company had, in the announcement of its first quarter results for current financial year, highlighted that turnover in the second quarter is expected to be lower with the absence of revenue contributions from marine repair services which the Group enjoyed in April and May 2002.

The Group had performed better than expected, registering a revenue of S$12.94m for the second quarter, well above the S$10.27m generated during first quarter. This was principally driven by the increased subsea robotics activities, supported by an enlarged ROV fleet. The successful acquisition of the fuel injection business in August 2002, coupled with buoyant sales in the turbocharger and oilfield segment, also contributed positively to the increase in turnover.

Except for the aforementioned and non-recurring gains arising from the sale of marine repair services business in the first quarter, the overall operating performance is reasonably close to the forecast statement made previously.

7.(c) A statement by the Directors of the Company whether any item or event of a material or

unusual nature, which would have affected materially the results of operations of the Group
and Company, has occurred between the date to which the report refers and the date on
which the report is issued. If none, to give a negative statement.

Subsequent to 30 September 2002, the Company's wholly-owned subsidiary, MTQ Engine Systems (Aust) Pty Ltd ("MTQES"), had entered into a conditional agreement with Turbo Torque Pty Ltd ("Turbo Torque") for purchase of its business as an on-going concern together with its business assets. Turbo Torque is engaged in similar activities as MTQES in the sales and servicing of turbochargers.

Apart from the above, in the opinion of the Directors, no item, transaction or event of a material or unusual nature has arisen in the interval between 30 September 2002 and the date of this announcement that would affect the results of the Company and the Group.

8. A commentary at the date of this 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

Looking ahead into the second half, the turbocharger division will enjoy a full half year contribution from the newly acquired fuel injection business. The successful acquisition of a new turbocharger service facility from Turbo Torque Pty Ltd on 24 October 2002 will also enhance the earnings of the division in the second half.

The subsea robotics division will see its North Sea operations entering into the lull winter months towards the end of the third quarter. Notwithstanding this, the division will enjoy the full support of its entire operational fleet of 6 vehicles in the second half year, particularly the heavy work-class Phoenix ROVs which are generally able to secure improved job margins than the Mohawk range of ROVs.

Performance of the oilfield division is likely be remain healthy despite the holiday seasons. The division is also likely to benefit from measures taken to further enhance productivity.

Following the sale of the marine repair business, losses suffered by the business in the early months of the current half year will not recur in the second half year.

Barring unforeseen circumstances, particularly any worsening of the current political uncertainties brought about by recent world events and any severe adverse currency fluctuation in the key operating currencies of the Group's respective divisions, the operating performance of the Group is likely to improve further in the second half.

However, having adopted quarterly reporting, third quarter results are expected to be substantially higher than that of the fourth quarter due to seasonal factors.

9. Dividend

(a) Present Period
Name of Dividend	Interim
Dividend Type	Cash
Dividend Rate	4 % per ordinary share less tax
Par value of shares	S$0.25
Tax Rate	22%
(b) Any dividend declared for the previous corresponding period?		None
(c) Total Annual Dividend
-
-	Latest Year (S$'000)	Previous Year (S$'000)
Ordinary	618	0
Preference	0	0
Total:	618	0

(d) Date payable

The interim dividend will be paid at a date to be announced later.

(e) Books closure date

Notice will be given at a later date on the closure of the Share Transfers Books and Register of Members to determine shareholders' entitlements to the interim dividend.

(f) Any other comments relating to Paragraph 9

NIL

10.(a) Balance sheet

 

	Group	Group	Company	Company
	30.9.02	30.6.02	30.9.02	30.6.02
	$'000	$'000	$'000	$'000
Share capital	19,800	19,800	19,800	19,800
Share premium account	1,944	1,944	1,944	1,944
Reserves	8,520	9,534	12,351	14,138
Share capital & reserves	30,264	31,278	34,095	35,882
Minority interests	1,083	892	-	-
Capital employed	31,347	32,170	34,095	35,882
Represented by:
Non-current assets
Goodwill	1,488	-	-	-
Fixed assets	22,592	21,288	2,521	2,318
Quoted investment	2,618	2,704	-	-
Subsidiary companies	-	-	22,738	23,762
Staff loans receivable	197	287	36	92
	26,895	24,279	25,295	26,172
Current assets
Cash at bank and in hand	11,137	13,076	9,336	10,372
Other current assets	17,123	15,393	773	1,050
	28,260	28,469	10,109	11,422
Current liabilitites
Bank loans & overdraft	(8,465)	(3,947)	-	-
Finance lease payables	(85)	(80)	-	-
Other current liabilities	(11,368)	(12,078)	(984)	(987)
	(19,918)	(16,105)	(984)	(987)
Net current assets	8,342	12,364	9,125	10,435
Non-current liabilities
Bank loans	(3,774)	(3,935)	-	-
Deferred taxation	(90)	(481)	(325)	(725)
Finance lease payables	(26)	(57)	-	-
Non-current liabilities	(3,890)	(4,473)	(325)	(725)
Net assets	31,347	32,170	34,095	35,882

10.(b) Cash flow statement

 

	Half year ended	Half year ended
	30.9.02	30.9.01
	S$'000	S$'000
Cash flows from operating activities:
Profit/(loss) before taxation	4,256	598
Add/ (less):
Amortisation of goodwill	12	-
Depreciation of property, plant and equipment	1,163	957
Gain on sale of property, plant and equipment	(27)	(83)
Profit on sale of business assets of a subsidiary company	(3,484)	-
Investment and interest income	(23)	(44)
Interest expense	249	183
Provision for diminuition in value of investments	685	-
Gain on sale of quoted investments	-	(2)
Goodwill written off for acquisition of additional interest in a subsidiary company	-	13
Operating income before reinvestment in working capital	2,831	1,622
(Increase)/decrease in receivable	(1,119)	2,807
Decrease in inventories and work-in-progress	439	286
Increase/(decrease) in payable	391	(2,488)
Currency re-alignment	(81)	(2)
Cash generated from/(used in) operations	2,461	2,225
Investment and interest income received	23	44
Interest expense paid	(249)	(183)
Income taxes paid	(457)	(256)
Net cash provided by/(used in) operating activities	1,778	1,830
Cash flows from investing activities:
Purchase of property, plant and equipment	(4,934)	(5,271)
Proceeds from sale of property, plant and equipment	461	4,919
Investment in new business	(2,639)	-
Investment in an associated company	(2,614)	-
Proceeds from sale of business assets of a subsidiary company, net	7,798	5,970
Staff loans receivable, net	(35)	(128)
Proceeds from sale of quoted investments	-	43
Additional investment in unquoted investment	-	(168)
Subscription for shares in a subsidiary company by minority shareholders	-	715
Net cash provided by investing activities	(1,963)	6,080
Cash flows from financing activities:
Dividend paid	(1,544)	(747)
Repayment of finance leases	(52)	(73)
Proceeds from bank overdraft, secured	506	-
Proceeds from term loans, secured	3,833	468
Proceeds from long-term loans, secured	2,500	640
Repayment of long-term loans	(1,802)	(359)
Proceeds from finance leases	-	35
Repayment of bank overdraft, secured	-	(202)
Net cash provided by financing activities	3,441	(238)
Net change in cash and cash equivalents	3,256	7,672
Cash and cash equivalents at beginning of financial period	7,881	534
Cash and cash equivalents at end of financial period	11,137	8,206

10.(c) Statement of changes in equity

 

Group	Share Capital	Share Premium	Foreign Currency Translation Reserve	Retained Earnings	Share Capital & Reserves
	S$'000	S$'000	S$'000	S$'000	S$'000
Balance as at 31 March 2001	19,800	1,944	531	4,888	27,163
Exchange difference on translation of overseas subsidiary companies			(12)		(12)
Net profit attributable to shareholders				235	235
Dividends paid in respect of previous financial				(747)	(747)
year, less tax
Balance as at 30 September 2001	19,800	1,944	519	4,376	26,639
Exchange difference on translation of overseas subsidiary companies			49		49
Net profit attributable to shareholders				1,246	1,246
Balance as at 31 March 2002	19,800	1,944	568	5,622	27,934
Exchange difference on translation of overseas subsidiary companies			38		38
Net profit attributable to shareholders				3,836	3,836
Dividends paid in respect of previous financial				(1,544)	(1,544)
year, less tax
Balance as at 30 September 2002	19,800	1,944	606	7,914	30,264




Company	Share Capital	Share Premium	Retained Earnings	Share Capital & Reserves
	S$'000	S$'000	S$'000	S$'000
Balance as at 31 March 2001	19,800	1,944	15,675	37,419
Net loss attributable to shareholders			(1,397)	(1,397)
Dividends paid in respect of previous financial			(747)	(747)
year, less tax
Balance as at 30 September 2001	19,800	1,944	13,531	35,275
Net profit attributable to shareholders			122	122
Balance as at 31 March 2002	19,800	1,944	13,653	35,397
Net profit attributable to shareholders			242	242
Dividends paid in respect of previous financial			(1,544)	(1,544)
year, less tax
Balance as at 30 September 2002	19,800	1,944	12,351	34,095

10.(d) Explanatory notes that are material to an understanding of the information provided in

10.(a), (b) and (c) above

Proceeds from sale of business assets of a subsidiary company in the consolidated statement of cashflow relate to proceeds arising from the sale of the marine repair service business of the Group's wholly-owned subsidiary, MTQ Engineering Pte Ltd as well as the sale of the Company's property which houses the operations.

11. Details of any changes in the company's issued share capital

There have been no changes in the company's issued share capital.

12. The group's borrowings and debt securities as at the end of the financial period reported

on, and comparative figures as at the end of the most recently announced financial
statements



(a) Amount repayable in one year or less, or on demand
As at 30/09/2002		As at 30/06/2002
Secured	Unsecured	Secured	Unsecured
S$'000 8,465	S$'000 0	S$'000 3,947	S$'000 0





(b) Amount repayable after one year
As at 30/09/2002		As at 30/06/2002
Secured	Unsecured	Secured	Unsecured
S$'000 3,774	S$'000 0	S$'000 3,935	S$'000 0

(c) Any other comments relating to Paragraph 12

NIL

13. A statement that the same accounting polices and methods of computation are followed

in the financial statements as compared with the most recent audited annual financial
statements. Where there have been any changes or departure from the accounting policies
and methods of computation, including those required by an accounting standard, this
should be disclosed together with the reasons for the change and the effect of the change

The Company has adopted the same accounting policies and methods of computation for the current financial period as those for the financial year ended 31 March 2002.

The presentation and classification of certain items in the financial statements have been changed to comply with the requirements of SAS and to provide proper comparisons with the current year's presentation.

BY ORDER OF THE BOARD

Fong Choon Seng
Company Secretary
30/10/2002