Profit or Loss

Balance Sheet

Review of Performance

A. Consolidated Statement of Comprehensive Income (1H FY2025 vs 1H FY2024)

1. Revenue:
   

   Total revenue increased by $1.98 million or 17.5% from $11.33 million in 1H FY2024 to $13.31 million in 1H FY2025. The increase in revenue is contributed by each of the engineering services, transportation services, investment properties leasing and security and manpower services segments.

   Increase in revenue was due to more contracts being executed in 1H FY2025 and recognition of revenue in investment properties leasing which is a new business segment of the Group.

2. Cost of Sales:
   

   Cost of sales increased by $1.33 million or 12.8% from $10.38 million in 1H FY2024 to $11.71 million in 1H FY2025. The increase was in line with the increase in total revenue.

3. Gross Profit:
   

   Gross profit increased by $0.66 million or 68.6% from $0.95 million in 1H FY2024 to $1.61 million in 1H FY2025. Correspondingly, the gross profit margins improved from 8.4% in 1H FY2024 to 12.1% in 1H FY2025. The increase was due to higher profit margin contracts were executed in 1H FY2025.

4. Other Income:
   

   Other income decreased from $0.41 million in 1H FY2024 to $0.06 million in 1H FY2025. This was mainly due to decrease in government grants received in 1H FY2025 and absence of rental income which has been recognized as revenue of the new business segment of investment properties leasing.

5. Administrative Expenses:
   

   Administrative expenses decreased from $1.88 million in 1H FY2024 to $1.86 million in 1H FY2025, mainly due to decrease in rental expenses as some leases have been returned and operations were consolidated in industrial spaces that the Company owns.

6. Other Expenses:
   

   Other expenses decreased from $0.48 million in 1H FY2024 to $0.20 million in 1H FY2025 mainly due to absence of costs related to investment properties leasing such as utilities and depreciation which were recognized as cost of sales in 1H FY2025.

7. Finance Costs:
   

   Finance costs increased from $0.14 million in 1H FY2024 to $0.25 million in 1H FY2025. This was due to the increase in loan borrowings in conjunction with the acquisition of an investment property during 1H FY2025.

B. Consolidated Statement of Financial Position as at 31 December 2024

1. Non-Current Assets:
   

   Non-current assets increased to $22.26 million as at 31 December 2024 from $14.15 million as at 30 June 2024, mainly due to the acquisition of an investment property during 1H FY2025.

2. Current Assets:
   

   Current assets decreased to $10.52 million as at 31 December 2024 from $10.83 million as at 30 June 2024. This was mainly due to decrease in cash and cash equivalent, offset against increase in deposit paid for dormitory construction.

3. Non-Current Liabilities:
   

   Non-current liabilities increased to $12.37 million as at 31 December 2024 from $7.12 million as at 30 June 2024. This was mainly due to increase in non-current loans and borrowings.

4. Current Liabilities:
   

   Current liabilities increased to $9.55 million at 31 December 2024 from $6.36 million as at 30 June 2024, mainly due to increase in loans and borrowings. Increase in loans and borrowings was due to acquisition of an investment property in 1H FY2025.

C. Consolidated Statement of Cash Flows (1H FY2025)

1. Net cash generated from operating activities in 1H FY2025 amounted to $0.24 million. This was mainly due to operating cash flow before working capital changes of $0.96 million, partially offset against increase in trade and other receivables.

2. Net cash used in investing activities in 1H FY2025 amounted to $9.04 million. This was mainly due to the acquisition of an investment property.

3. Net cash generated from financing activities in 1H FY2025 amounted to $7.33 million. This was mainly due to proceeds from additional loan for acquisition of investment property, proceeds from loan from holding company and proceeds from noncontrolling shareholders of subsidiaries, offset with repayment of lease liabilities and loans and borrowings.

Commentary

For the Engineering business, Building and Construction Authority (“BCA”) projects the total construction demand, i.e. the value of construction contracts to be awarded, to range between S$47 billion and S$53 billion in nominal terms in year 2025, underpinned by the expected award of contracts for several large-scale developments, such as Changi Airport Terminal 5 (T5) and the expansion of the Marina Bay Sands Integrated Resort, alongside public housing development and upgrading works.¹

For our transportation business, the Group expects demand for its transport services to improve gradually and the improvement in the business to sustain. The Group is continually looking to take on new contracts with good margins, and supplementing this with the hiring of new drivers where possible.

For our security and manpower business, the Group expects the improvement in the business to sustain but mitigated by the continual increase in cost due to the progressive wage model implemented by Ministry of Manpower.

For our new investment properties business, the Group expects business to gradually pick up with increased marketing efforts as well as the various asset enhancement initiatives the Group has undertaken which would see an upward revision in the rental rates.

Operating within this current challenging and uncertain environment, the Group remains focused on its efforts to ride on any improvements in the economic situation, and to improve its results by opting to shift the focus to higher-margin opportunities for the business units.

¹ BCA, Construction Demand to Remain Strong for 2025, 23 January 2025.