Update on unaudited Financial Performance and Position
Comparison of 2nd Quarter of 2011 (“2Q 2011”) against 2nd Quarter of 2010 (“2Q 2010”)
Group Revenue for 2Q 2011 was S$4.6 million, a decrease of 9.5% from 2Q 2010. However, compared with 2Q 2010, Gross Profit for 2Q 2011 increased by S$0.49 million, or 37.2%. Gross margin for 2Q 2011 was 39.2%, significantly higher than the gross margin of 25.9% for the comparable period a year earlier, as in 2Q 2011 the Group had undertaken projects with proportionately higher services revenue content (with higher gross margins), as opposed to hardware revenue content.
The Group has continued to manage closely and rationalise its operating costs. Operating expenses for 2Q 2011 was S$2.1 million, ie. 13.8% lower than that of 2Q 2010 due mainly to reductions in headcount and office rentals in the Group’s corporate office.
Other Income of S$341,000 comprises write-back of a provision for doubtful debt mainly in respect of an overseas customer whose debt had been fully provided for in 2010 but who has, however, made repayments during the current financial year.
Group Net Profit for 2Q 2011 was S$53,000, a significant improvement from the S$1.1 million loss in 2Q 2010.
Comparison of First Half of 2011 (“1H 2011”) against First Half Year of 2010 (“1H 2010”)
Comparing 1H 2011 against 1H 2010, Revenue rose 14.9% from S$9.43 million to S$10.84 million, and Gross Profit increased 64.9%, from S$2.31 million to S$3.81 million. Operating expenses decreased by 19.3%, from S$4.98 million to S$4.02 million, attributable mainly to reductions in headcount and office rentals at the Group’s corporate office.
The Operating expenses of 1H 2011 included legal & professional fees, amounting to S$117,000, incurred in respect of matters that originated mainly during the second half of 2010. In spite of this, the Group has recorded a Net Profit of S$135,000 for 1H 2011, which is a significant achievement when compared with the net loss of S$2.52 million incurred in 1H 2010.
Material Development and Future Direction
Since the last update on 13 May 2011, there has been no material development that may have a significant impact on the financial position of the Group.
The Group’s core business continues to perform notwithstanding the challenging global economic environment. The Company’s management and operations teams have remained intact and continue to service its customers and fulfill its contractual commitments.
The Group will continue to diligently evaluate other business opportunities with a view to diversifying its revenue streams and business portfolio, as part of its ongoing strategy to enhance shareholders’ value.