13
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
OPERATIONS
& BUSINESS REVIEW
Financial Performance Review
Revenue
The Group’s revenue for the financial year
ended 30 June 2016 (“FY2016”) of $57.4
million was a decrease of $4.3 million or
6.9%, from $61.7 million for the financial year
ended 30 June 2015 (“FY2015”). Revenue
contribution from the Marine & Offshore
segment declined by $3.3 million to $52.3
million in FY2016 compared to $55.6 million
in FY2015. The decline was mainly due to
the negative impact of crude oil prices on
customers in the offshore oil & gas industry.
Revenue contribution from the Property
Development segment declined by $0.9
million or 15.0%, from $6.0 million in FY2015
to $5.1 million in FY2016.
• TIEC Holdings Pte. Ltd. (“TIEC”)
contributed revenue of $0.9 million
arising from the sale of a completed
unit of the Urban Heritage development
project.
• ECG Property Services Pte. Ltd. (“ECG”)
and its subsidiaries contributed the
remaining revenue of $4.2 million.
The decline was mainly due to reduced
revenue contribution from TIEC in FY2016
as compared to FY2015. This is expected
because the Singapore private residential
property market remained subdued during
FY2016.
Revenue from Singapore remained the
highest geographical segment, 65.8% of
the Group’s revenue in FY2016, compared
to 69.0% in FY2015. The decrease in
revenue from Singapore was mainly due to
a decline in revenue from the offshore oil
& gas industry resulting from the drop in
crude oil prices.
Gross profit
The overall gross profit in FY2016 decreased
slightly by $0.8 million or 4.3% to $17.9
million in FY2016 from $18.7 million in
FY2015. The Group’s gross profit margin
improved by 0.9 percentage points to 31.2%
in FY2016 compared to 30.3% in FY2015.
• The Marine & Offshore segment
contributed gross profit of $17.0 million
to the Group in FY2016 as compared to
$17.5 million in FY2015. The gross profit
margin in FY2016 was 32.4%, slightly
higher than the gross profit margin of
31.4% in FY2015. The increase in gross
profit margin was attributable to the
segment’s reverse osmosis machine
business which has a strategy of
preserving its margins by providing
higher quality products to customers and
avoiding competition with lower cost
producers.
• The Property Development segment
contributed gross profit of $0.9 million
to the Group in FY2016 as compared to
$1.2 million in FY2015, representing a
gross profit margin of 18.5% and 19.7%
respectively. The decrease in gross profit
margin was due to TIEC’s. However, this
was partially offset by an improvement in
gross profit margin due to the valuation
consultancy business which increased
its contribution to the segment’s gross
profit in FY2016.
