Second Quarter Ended Six Months Ended 30.6.2017 30.6.2016 +/(-) 30.6.2017 30.6.2016 +/(-)
Note $'000 $'000 % $'000 $'000 %
Revenue | 3,052 2,902 | 5.2 5,959 5,255 | 13.4 | ||||
Cost of sales | (1,033) (1,034) | (0.1) (2,093) (2,184) | (4.2) | ||||
Gross profit | 2,019 | 1,868 | 8.1 | 3,866 | 3,071 | 25.9 | |
Other income | 1 | 1,518 | 4,720 | (67.8) | 5,443 | 8,585 | (36.6) |
General and administrative costs | (1,621) | (1,547) | 4.8 | (2,967) | (2,975) | (0.3) | |
Other operating costs | 2 | (232) | (805) | (71.2) | (712) | (1,732) | (58.9) |
Finance costs Share of after tax results of associates | (318) | (402) | (20.9) | (687) | (617) | 11.3 | |
and joint ventures | 3 155 107 | 44.9 1 557 | (99.8) | ||||
Profit before taxation | 1,521 3,941 | (61.4) 4,944 6,889 | (28.2) | ||||
Taxation | 4 (146) (615) | (76.3) (348) (778) | (55.3) | ||||
Net profit after taxation | 1,375 3,326 | (58.7) 4,596 6,111 | (24.8) |
Attributable to:
Owners of the Company | 1,375 | 3,326 | (58.7) | 4,596 | 6,111 | (24.8) |
Profit for the year attributable to owners of the Company | 1,375 | 3,326 | 4,596 | 6,111 |
n.m. denotes not meaningful.
Notes to Group Profit and Loss Statement
1. Other income comprised the following: | 2Q2017 | 2Q2016 | +/(-) | FY2017 | FY2016 | +/(-) |
$'000 | $'000 | % | $'000 | $'000 | % | |
Interest income | - | 77 | n.m. | 1 | 92 | (98.9) |
Gain on disposal of investment properties | 2,301 | 334 | n.m. | 3,956 | 2,247 | 76.1 |
Gain on disposal of non-current investments | 220 | - | n.m. | 220 | - | n.m. |
Other investment income | 117 | 841 | (86.1) | 117 | 841 | (86.1) |
Foreign exchange gain | (1,196) | 2,424 | n.m. | 984 | 4,284 | (77.0) |
Refund of property tax | - | 957 | n.m. | - | 957 | n.m. |
Sundry | 76 87 | (12.6) 165 164 | 0.6 | |||
1,518 4,720 | 5,443 8,585 |
The weakening of the Sterling Pound against Singapore Dollars resulted in unrealised translation gain mainly attributable to our Sterling Pound loans year to date, but a loss in Q2. This profit and loss impact is offset by translation loss recorded in Other Comprehensive Income. Sterling Pound has declined from $1.80876 as at 31 December 2016 to $1.76779 as at 30 June 2017.
Other operating costs comprised the following:
Allowance made for impairment on
2Q2017 2Q2016 +/(-) FY2017 FY2016 +/(-) $'000 $'000 % $'000 $'000 %- current investments 27 744 (96.4) 42 1,334 (96.9)
non-current investments 205 - n.m. 670 - n.m. Allowance made for doubtful debts
due from other receivables - 18 n.m. - 18 n.m.
- 43
n.m. - 380
n.m.
232 805
712 1,732
due from an associate
Overall, allowance for impairment loss decreased yoy and qoq on current and non- current investment securities relate to investment securities that had suffered a significant or prolonged decline in the market value below the acquisition cost of those investments;
Allowance for receivables due from an associate of $0.4 million was made in 2016 following the disposal of the commercial property held by the associate.
Share of after tax results of associates and joint ventures decreased by $0.6 million yoy mainly due to share of loss of $0.6 million from an associated company, Clan Kilmuir (Jersey) Limited which the Group acquired in March 2016. A portion of the share of loss of $0.3 million is attributable to depreciation of an investment property.
Effective tax rates for 1H2017 and 2Q2017 were 7.0% (1H2016: 11.3%) and 9.6% (2Q2016: 15.6%) respectively. The taxation charge for the Group for 1H2017 and 2Q2017 were lower than that arrived at by applying the statutory tax rate of 17% to the profit before taxation mainly due to certain gains being capital in nature, absence of tax effect on the share of results of associates and joint ventures, offset by certain non- deductible expenses and losses incurred by foreign subsidiaries which are not available for set off against profits of local subsidiaries.
Profit before taxation included the following:
Group
Second Quarter Ended Six Months Ended 30.6.2017 30.6.2016 +/(-) 30.6.201730.6.2016 +/(-)
Note $'000 $'000 % $'000 $'000 %
Investment income 555 615 (9.8) 613 686 (10.6)
Interest income (included in revenue) 275 281 (2.1) 606 632 (4.1)
Interest on borrowings (318) (402) (20.9) (687) (617) 11.3 Depreciation on property, plant and
equipment and investment properties (520) (507) 2.6 (1,068) (1,073) (0.5) Allowance made for doubtful debts
due from an associate 2 - (43) n.m. - (380) n.m.
due from other receivables 2 - (18) n.m. - (18) n.m. Allowance made for impairment loss on
- quoted current investments 2 (27) (744) (96.4) (42) (1,334) (96.9)
unquoted non-current investments 2 (205) - n.m. (670) - n.m. (Under)/over provision of taxation in prior years - - - - - - Foreign exchange (loss)/gain 1 (1,196) 2,424 n.m. 984 4,284 (77.0)
Gain on disposal of investments (included in revenue) 280 195 43.6 863 324 n.m. Gain on disposal of non-current investments
included in other income 1 220 - n.m. 220 - n.m. Gain on disposal of investment properties
- included in other income 1 2,301 334 n.m. 3,956 2,247 76.1
Statement of Comprehensive Income
Second Quarter Ended Six Months Ended Note 30.6.2017 30.6.2016 +/(-) 30.6.2017 30.6.2016 +/(-)
$'000 $'000 % $'000 $'000 %
Net profit after taxation 1,375 3,326 (58.7) 4,596 6,111 (24.8) Other comprehensive gain/(loss):
Items that may be reclassified subsequently to profit or loss
Net (loss)/gain on available-for-sale
investments (net of tax) 1 (437) (31) n.m. 1,983 (173) n.m. Exchange difference arising from
- consolidation 2 911 (1,531) n.m. (769) (3,285) (76.6)
- revaluation of net investment in foreign operations 2 1,290 (2,928) n.m. (1,224) (6,234) (80.4) Other comprehensive income/(loss), net of tax 1,764 (4,490) n.m. (10) (9,692) (99.9)
Owners of the Company Non-controlling Interests | 3,139 (1,164) - - | n.m. | 4,586 (3,581) - - | n.m. |
3,139 (1,164) | 4,586 (3,581) |
Total comprehensive income/(loss) for the period 3,139 (1,164) n.m. 4,586 (3,581) n.m. Total comprehensive income/(loss) for the period attributable to:
Net gains on available-for-sale investments (net of tax) in 1H2017 were mainly due to increase in fair value of available-for-sale investments arising from favourable market conditions offset by realisation of fair value gains on disposal on available-for-sale investments. Net losses on available-for-sale investments in 2Q2017 were mainly due to decreases in fair value of available-for-sale investments arising from unfavourable market conditions and realisation of fair values gains on disposal of available-for sale investments.
Exchange differences arising from the consolidation of $0.8 million and revaluation of net investment in foreign operation of $1.2 million in 1H2017 were mainly due to foreign exchange impact arising from the translation of Sterling Pound against Singapore Dollars for those UK net investments and assets. In 2Q2017, the exchange differences arising from the consolidation of $0.9 million and revaluation of net investment in foreign operation of $1.3 million were mainly due to favourable foreign exchange impact for the quarter. The weakening of the Sterling Pound against Singapore Dollar resulted in overall impact to Hwa Hong Corporation from net foreign exchange loss of approximately $1 million for 1H2017. This is made up of $0.8 million and $1.2 million in Other Comprehensive Income, which is partially offset by a translation gain in the profit and loss of $1 million mainly attributable to our Sterling Pound loans. For 2Q2017, the overall net foreign exchange gain was approximately
$1 million made up of $0.9 million and $1.3 million gain in the Other Comprehensive Income which is partially offset by a translation loss in the profit and loss of $1.2 million.
1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Group Company 30.6.2017 31.12.2016 30.6.2017 31.12.2016Note | $'000 | $'000 | $'000 | $'000 | |
Non-current assets | |||||
Property, plant and equipment | 4,595 | 4,672 | - - | ||
Investment properties | 1 | 111,586 | 120,254 | - - | |
Investment in subsidiaries - - 169,687 169,687 | |||||
Investment in joint ventures | 6,960 | 7,311 | - | - | |
Investment in associates | 26,244 | 26,550 | 746 | 746 | |
Investment securities | 2 | 22,928 | 20,780 | - | - |
Other receivables | 5,474 | 5,362 | - | - | |
Amounts due from associates | 2,000 | 2,000 | - | - | |
179,787 | 186,929 | 170,433 | 170,433 | ||
Current assets | |||||
Tax recoverable | 5 | - | - | ||
Properties classified as held for sale | 3 | 2,413 | - | - | - |
Trade receivables | 4 | 1,404 | 595 | - | - |
Prepayments and deposits | 198 | 223 | 40 | 53 | |
Other receivables | 5 | 8,009 | 13,519 | - | - |
Amounts due from subsidiaries Amounts due from associates | 6 | - 7,323 | - 7,355 | 1,694 - | 8,674 - |
Investment securities | 29,462 | 28,872 | - | - | |
Cash and bank balances | 7 | 42,115 | 36,866 | 1,184 | 1,381 |
90,929 | 87,430 | 2,918 | 10,108 | ||
Current liabilities | |||||
Bank overdrafts (secured) | (3) | - | - | - | |
Trade payables | 8 | (1,308) | (683) | - | - |
Other payables | 9 | (2,459) | (1,924) | (320) | (350) |
Accrued operating expenses | (1,799) | (1,944) | (155) | (199) | |
Amounts due to associates | (551) | (563) | (371) | (381) | |
Bank loans (secured) | 10 | (55,010) | (57,705) | - | - |
Tax payable | (1,540) | (1,419) | - | - | |
(62,670) | (64,238) | (846) | (930) | ||
Net current assets | 28,259 | 23,192 | 2,072 | 9,178 | |
Non-current liabilities | |||||
Deferred tax liabilities | (4,303) | (4,034) | - | - | |
Bank loans (secured) | 10 | (10,958) | (11,212) | - | - |
Other payables | (379) | (456) | - | - | |
(15,640) | (15,702) | - | - | ||
Net assets | 192,406 | 194,419 | 172,505 | 179,611 |
Hwa Hong Corporation Limited published this content on 27 July 2017 and is solely responsible for the information contained herein.
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