03
Annual Report 2015
TEHO INTERNATIONAL INC LTD.
Prestige Phnom Penh is the latest in the
pipeline of Hotel Okura’s growth target of
100 hotels from the present 74.
I am confident that not only the hotel, but the
entire The Bay project is going to redefine the
skyline of Phnom Penh and make it a new
iconic masterpiece.
FY2015
The Group’s growth trajectory continued
in FY2015 as its revenue registering $61.7
million, an increase of $1.3 million or 2.1%
from that of FY2014. The Group’s gross profit
in FY2015 increased by 3.5% to $18.7 million.
The revenue contribution from the Marine,
Offshore Oil & Gas segment remained stable
at $55.6 million in FY2015 compared to
$55.3 million in FY2014 despite the fall in oil
price and slow down in world’s economy.
Notwithstanding the oil price squeeze and
a lacklustre world economy, the Marine,
Offshore Oil & Gas segment saw profit before
tax hitting $1.7 million.
FY2015 saw the Group investing heavily to
grow its property development business.
The acquisition of ECG in November 2014
saw the business contributing $3.7 million
in revenue for the seven-month period in
FY2015. The balance revenue of $2.3 million
came from TIEC Holdings Pte Ltd with the
substantial completion of the Urban Heritage
development project.
The Group’s total operating expenses
(consisting of distribution, administrative and
other operating expenses went up by 80.5%
to $26.1 million. This was mainly because of
the rise of $2.6 million in the Marine, Offshore
Oil & Gas segment and increase of $9.0
million in the Property Development segment.
The Group recorded a loss for the year of
$7.7 million compared to a profit of $3.4 million
in FY2014. The loss was mainly attributable
to substantial expenses on marketing,
advertising and promotional activities relating
to The Bay. These marketing and promotional
activities are essential and important to
ensure success of the project. However,
such expenses have to be expensed when
incurred and cannot be capitalised in FY2015.
Notwithstanding the fact that we have sold
over 100 condominium units of The Bay
during the soft launch events, no revenue
were recognised in FY2015 in accordance
with the revenue recognition principles of the
financial reporting standards.
The open market value of the Group’s
unsold units of development property in
Singapore declined slightly compared to that
in the previous financial year. Consequently,
the Group made an impairment charge in
respect of the goodwill attributable to the
Property Development segment’s property
development projects in Singapore and
recorded foreseeable losses on those
development properties.
While the current property landscape is a
challenging one, we believe that challenges
also open up opportunities. We are convinced
that our strategic investment in The Bay
will help us to ride the wave of growth and
achieve better results.
A WARM WELCOME
In January 2015, the Board appointed Mr Oo
Cheong Kwan Kelvyn as a Non-Executive and
Independent Director. Kelvyn brings with him
a wealth of experience in the field of corporate
law specialising in capital markets, private
and public M&A. The Group looks forward
to tapping his knowledge and experience
particularly on corporate governance to
ensure that decisions continue to be made in
the best interest of our valued shareholders.
On behalf of the Group, I warmly welcome
Mr Kelvyn Oo as a member of the Board.
APPRECIATION
Last but not at all least, on behalf of the Board,
I would like to express my deepest and most
sincere appreciation to the management and
staff of the Group. Without their commitment
and diligence, the Group would not have been
able to accomplish the important milestones
during FY2015.
My valued fellow directors, thank you for
your hard work and knowledge in guiding the
Group to where it is today. Let us continue to
strive for greater success and let us continue
to grow this business together.
Finally, to our treasured shareholders, business
associates, suppliers and customers,
a resounding thank you, for the confidence,
assurance, trust and support that you have
placed in TEHO. You are the grounds to our
success.
LIM SEE HOE
Executive Chairman & CEO
