News

Unaudited Full 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

NOTE:
Net profit for the year was stated after crediting/ (charging):-

 

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






1(b)(ii) Aggregate amount of group's borrowings and debt securities


Amount repayable in one year or less, or on demand



As at 30/06/2003

As at 30/06/2002

Secured	Unsecured	Secured	Unsecured
$'000 12,647	$'000 0	$'000 11,024	$'000 0



Amount repayable after one year



As at 30/06/2003

As at 30/06/2002

Secured	Unsecured	Secured	Unsecured
$'000 16,451	$'000 0	$'000 7,525	$'000 0



Details of any collateral

The Group's borrowings are secured by way of:
? Corporate guarantee from the Company and certain subsidiaries of the Group
? Legal mortgage of the Group's leasehold property
? Legal mortgages over certain vessels of the subsidiaries
? Legal mortgages over certain plant and machineries of the subsidiaries
? Assignment of certain charter income of the subsidiaries
? Assignment of insurance of certain vessels of the subsidiaries

 

1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year






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






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 or 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

 

On 17 January 2003, the shareholders approved the allotment and issue of 14,799,995 ordinary shares of $1.00 each as consideration for the acquisition of the subsidiaries pursuant to the Restructuring Exercise.

On 23 January 2003, the shareholders approved inter-alia the following:-

(i) the sub-division of each ordinary shares of $1.00 each in the existing authorised and issued and paid-up share into 148,000,000 ordinary shares of $0.10 each; and
(ii) the issue of 50,000,000 new ordinary shares of $0.10 each at a premium of $0.11 per share pursuant to the initial public offering of the Company's shares

The Company was listed on the Singapore Exchange Securities Trading Limited on 17 March 2003.

 

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 or reviewed by the auditors.

 

3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter)

 

Not applicable.

 

4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied

 

Yes.

 

5. 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

 

Not applicable.

 

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

NOTE:
The calculation of basic earnings per share is based on net profit for the year attributable to ordinary shareholders and the weighted average of 168,833,333 (2002: 148,000,000) ordinary shares in issue during the year, calculated based on the assumption that the Restructuring Exercise had been completed on 1 July 2001.

 

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

NOTE:
The calculation of net asset value of the Group and of the Company is based on 198,000,000 (2002: 148,000,000 and 30 respectively), calculated based on the assumption that the Restructuring Exercise had been completed on 1 July 2001.

 

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

 

REVIEW OF OPERATING PERFORMANCE FOR THE FULL YEAR ENDED 30 JUNE 2003

Revenue
Group revenue increased by 22.2% from $64.6 million in financial year ended 30 June 2002 ("FY2002") to $78.9 million for financial year ended 30 June 2003 ("FY2003"), mainly attributable to the increase in revenue from shipbuilding operations by 32.7% and shipchartering and rental operations by 37.7%.

Revenue from shipbuilding operations increased by $8.6 million from $26.5 million in FY2002 to $35.1 million in FY2003. The higher revenue was attributable to the recognition of revenue for the construction of 9 tugboats and 24 barges in FY2003, compared to 5 tugboats and 29 barges in FY2002.

Revenue from shiprepairs and other marine related services for FY2003 was $14.1 million, a decrease of 14.7% compared to FY2002. The decrease was due to fewer shiprepairs and other marine related services undertaken in FY2003 as compared to FY2002.

Revenue from shipchartering and rental operations increased by $8.1 million from $21.6 million in FY2002 to $29.7 million in FY2003 due to increased demand from existing and new customers from the marine and offshore infrastructure sector.

Gross profit and gross profit margin
For FY2003, overall gross profit was $14.0 million, an increase of 23.1% compared to FY2002. Overall gross profit margin also improved marginally from 17.6% to 17.7% due mainly to improved gross profit margins from shiprepairs and other marine related services as well as shipchartering and rental operations.

Gross profit from shipbuilding operations was $2.2 million for FY2003, a decline of $1.7 million or 44.3% compared to FY2002. The lower gross profit margin for the shipbuilding operations for FY2003 compared to FY2002, and consequentially the lower gross profit, was mainly attributable to the lower margin from the later projects that were secured at more competitive pricing and increase in steel prices.

Gross profit from shiprepairs and other marine related services increased from $3.5 million in FY2002 to $5.6 million in FY2003, an increase of $2.1 million. Gross profit margin improved from 21.4% in FY2002 to 39.9% in FY2003. These increases were mainly due to a higher proportion of higher value-added repair jobs which generally commands higher margins.

Gross profit from shipchartering and rental operations was $6.2 million, an increase of $2.3 million as compared to $3.9 million in FY2002. Gross profit margin for shipchartering and rental operations improved from 18.3% in FY2002 to 20.8% in FY2003. The improvement was mainly due to better pricing from the marine and offshore infrastructure projects which was partially offset by the increase in fuel prices and higher reliance on third parties vessels.

Other income
Other income increased by $1.0 million from $1.4 million in FY2002 to $2.4 million in FY2003. Other income in FY2003 comprised mainly of gain on disposal of plant and equipment of $1.6 million and miscellaneous income of $0.8 million. Miscellaneous income comprised mainly of insurance compensation of $0.5 million.

Administrative expenses
Administrative expenses were $3.6 million in FY2003 compared to $2.7 million in FY2002. The increase was mainly due to higher staff salaries and related costs of $0.9 million due to employment of additional staff.

Other operating expenses
Other operating expenses were $1.1 million in FY2003 compared to $0.1 million in FY2002. Other operating expenses comprised mainly of foreign exchange loss of $0.4 million and net allowance for doubtful trade receivables of $0.4 million.

Finance costs
Finance costs were $1.2 million in FY2003 compared to $1.0 million in FY2002. Finance costs comprised substantially of $0.9 million incurred for term loans meant substantially for our operational needs.

Profit before taxation
The Group achieved a profit before taxation of $10.5 million and $9.0 million for FY2003 and FY2002 respectively. The increase of $1.5 million or 17.0% was due to the 23.1% improvement in gross profit and higher other income which was partially offset by the higher expenses.

Income tax expense
The Group's taxation charge in FY2003 was $1.4 million compared to $1.9 million in FY2002, a decrease of $0.5 million or 23.9%. This was due to the higher proportion of exempt shipping income. The Group's effective tax rate was 15.7% for FY2003 compared to 21.4 % for FY2002


REVIEW OF FINANCIAL POSITIONS AS AT 30 JUNE 2003 AND 30 JUNE 2002

Non-current assets
Non-current assets comprised mainly of property, plant and equipment, stated at cost less depreciation, amortisation and impairment loss. Our non-current assets increased by $3.3 million to $58.6 million as at 30 June 2003 from $55.3 million as at 30 June 2002. We disposed off vessels and plant and equipment of net book value totalling $2.9 million and acquired vessel and plant and equipment of $12.1 million. Depreciation charge for the year amounted to $6.1 million.

Current Assets
Current assets comprised of inventories, construction work-in-progress, trade and other receivables as well as cash and cash equivalents.

Current assets increased by $35.3 million to $56.2 million as at 30 June 2003 from $20.9 million as at 30 June 2002. The increase was mainly due to the increase in inventories, construction work-in-progress, trade and other receivables and cash and cash equivalents. Inventories increased by $4.0 million mainly due to stock-up of steel plates and certain customer-specified equipments for existing shipbuilding projects. As at 30 June 2003, construction work-in-progress was higher than that as at 30 June 2002 by $13.1 million as we had 28 uncompleted shipbuilding projects as at FY2003 compared to 5 such projects as at FY2002. Trade and other receivables increased by $10.2 million due to the overall increase in revenue and the substantially higher revenue billed in late FY2003 which were not due for payments until early FY2004. The increase of cash and cash equivalents by $8.0 million to $9.9 million as at 30 June 2003 was due to the Initial Public Offerings proceeds received by the Company in March 2003 and draw-down of long term loans for repayment of short-term bank borrowings, amount due to related parties and working capital purposes.


Current Liabilities
Current liabilities comprised of bank overdrafts, trade and other payables, progress billings in excess of construction work-in-progress, amounts due to related parties, trust receipts, current portions of interest-bearing borrowings and hire purchase creditors and current tax payable.

Current liabilities increased by $11.0 million to $45.3 million as at 30 June 2003 from $34.3 million as at 30 June 2002. Trade and other payables, progress billings in excess of construction work-in-progress and trust receipts increased by $9.3 million, $6.6 million and $7.2 million respectively while bank overdraft and amount due to related parties decreased by $5.1 million and $5.8 million respectively. The increase in trade and other payables was primarily due to the large steel plate purchase which was in line with the increased business activities. Progress billings in excess of construction work-in-progress increased mainly due to advance billings for tugboats in accordance with agreed milestones. Trust receipts increased owing to the increased shipbuilding contracts which utilised trust receipts for the purchase of engines and other large equipments required in the projects. The decrease in bank overdraft and amount due to related parties was due to settlements made from draw-down of term loans.


Non-current liabilities
Non-current liabilities comprised of interest-bearing borrowings, hire purchase creditors and deferred tax liabilities. Non-current liabilities increased by $9.4 million to $19.3 million as at 30 June 2003 from $9.9 million as at 30 June 2002. The increase was mainly due to draw-down of long term loans which was used to repay amounts due to related parties and bank overdraft.


Share Capital and Reserves
Shareholder's equity, comprising share capital, share premium and accumulated profits, increased by $18.1 million or 56.8% to $50.1 million as at 30 June 2003 from $32.0 million as at 30 June 2002. This was due to the issuance of 50 million new ordinary shares of $0.10 each at a premium of $0.11 per share for net proceeds of $9.0 million and net profits of $9.1 million earned by our Group during the year.

 

9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results

 

The performance of the Group is in line with the prospect statement indicated in our interim results announcement on 31 March 2003.

 

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

 

Industry Outlook
In the last few years, the local marine industry has been seeing increasing buoyancy. According to the Association of Singapore Marine Industry, the Singapore marine sector achieved a record turnover of $4.4 billion in 2002. Order books for the local marine industry for 2003 are expected to remain healthy with some spillover into 2004.

Against this backdrop of a positive industry outlook, the Group is confident that ASL Marine, with its track record and established reputation, will be able to ride on the strong growth momentum of the marine industry.

However, profit margin may be affected as insurance premium is expected to continue to increase in view of the relatively high number of piracy cases in this region. This increase is additional to the overall higher insurance expenses owing to the global increase in insurance premium.

Further, as steel and fuel are major cost items for the shipyard and the shipchartering operations, further increases in their prices will have an adverse impact on margin.


Shipyard Operations
As at 30 June 2003, the Group have an outstanding order book for shipbuilding of approximately $58.2 million. These projects are expected to be completed or substantially completed within FY2004, with some spillover into 1H2005. Overall, barring any unforeseen circumstances, the gross profit margin for FY2004 is expected to be comparable to that of FY2003.

The Group believes that demands from the marine and offshore infrastructure, the offshore oil and gas and the energy sectors will continue to remain strong.

Further, given the enlarged pool of repeat customers and the expected operations of our new floating dock in 2H2004, the Group believes that our shiprepair revenue will grow in tandem with the increase in our drydocking capabilities and capacity.


Shipchartering Operations
As at 30 June 2003, the Group have an outstanding order book for shipchartering of approximately $12.5 million, comprising mainly of long-term or project-based contracts. In addition, a significant portion of shipchartering revenue is short-term and ad-hoc contracts. Further, the Group's associated company, ASL Energy Pte Ltd ("ASL Energy"), has secured a $127 million contract to transport coal in Indonesia waters for a period of 5 years.

The Group, recognising the higher gross profit margin and sustainability of the shipchartering operations, have embarked on a vessel building programme. Inclusive of ASL Energy, the Group expects 45 vessels, worth approximately $47.5 million, to be completed and delivered progressively by FY2005. These new vessels will provide an additional income stream to the Group once completed. Pending deliveries of the new vessels, the Group continues to charter vessels from third parties to supplement its existing fleet of 48 tugboats and 59 barges.

Further, as part of ongoing strategy to expand geographical coverage, the Group is looking to strengthen its presence in regional markets, where the Group sees business opportunities in the provision of shipbuilding, shiprepair and shipchartering services to marine infrastructure activities such as the building of terminals and land reclamation projects, offshore oil and gas and energy sectors.


Barring any unforeseen circumstances, based on the generally more positive business environment for both the local marine industry and the Group, and the outstanding order books, the Group is optimistic that the performance for the Group for FY2004 will be comparable to that of FY2003.

 

11. Dividend


(a) Current Financial Period Reported On

Any dividend recommended for the current financial period reported on? Yes



Name of Dividend	First & Final
Dividend Type	Cash
Dividend Rate	1.4 cents per ordinary share (one-tier tax)
Par value of shares	$0.10
Tax Rate	Not Applicable



(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? None

(c) Date payable

The first and final dividend, if approved at the Annual General Meeting, will be paid on 18 December 2003.

(d) Books closure date

Notice is hereby given that, the Share Transfer Books and registrar of Members of the Company will be closed on 29 November 2003. Duly completed transfers received by the Company's Shares Registrar up to the close of business at 5.00 p.m. on 28 November 2003 will be registered to determine shareholders' entitlements to the dividends. In respect of shares in securities accounts with The Central Depository (Pte) Limited ("CDP"), the said dividends will be paid by the Company to the CDP which will in turn distribute entitlements to holder of shares in accordance with its practice.

 

12. If no dividend has been declared/recommended, a statement to that effect

 

Not applicable.

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

 

Please refer to item 8.

 

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)



	Latest Full Year ($'000)	Previous Full Year ($'000)
Ordinary	2,772	0
Preference	0	0
Total:	2,772	0


 

BY ORDER OF THE BOARD

Ang Kok Tian
Managing Director
18 September 2003