15
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
Bay” project, and having considered the
market conditions in Phnom Penh and
other factors, the Group and its joint
venture partner have decided to put on
hold the residential development phase
of the project. The Group is currently
working together with its joint venture
partner in assessing the market changes
and repositioning the development
project. This has resulted in the
impairment loss in respect of goodwill
attributable to ECG.
The remaining $1.0 million increase in other
operating expenses is attributable to the
Marine & Offshore segment:
• Impairment loss in respect of goodwill
and investment in associate attributable
to the Marine & Offshore segment’s
subsidiaries in Singapore amounted to
$2.3 million. Due to the negative impact
of crude oil prices on the outlook of the
offshore oil & gas industry, the projected
cash flows to be derived from the
subsidiaries in the Marine & Offshore
segment was affected unfavourably,
thus, resulting in the impairment loss.
The increase was partially offset by:
• Foreign exchange losses decreased by
$1.2 million.
Other operating expenses also include the
following:
• Bad debts written off amounting to
$0.2 million relate to the Property
Development segment.
• Land rental amounting to $0.5 million
in FY2016 represents an increase of
$0.2 million from $0.3 million in FY2015.
The increase is mainly attributable to
expenses incurred to rent a parcel of land
in Cambodia to be used to build a show
flat for “The Bay” project.
• Operating lease expenses amounting
to $1.2 million in FY2016 represents
an increase of $0.2 million from $1.0
million in FY2015. The increase is mainly
OPERATIONS
& BUSINESS REVIEW
attributable to rental of additional
storage and logistics facilities for the
Marine & Offshore segment.
Finance costs increased by $0.5 million from
$0.8 million in FY2015 to $1.3 million in
FY2016, even though loans and borrowings
decreased by $18.8 million from $62.5
million in FY2015 to $43.7 million in FY2016.
The Group redeemed loanswith outstanding
amounts totalling $10.5 million as at 30 June
2015, at the end of March 2016 following the
Group’s disposal of its leasehold property
at 47 Tuas Avenue 9. Thus, the effect of
reduction in finance costs arising from the
redemption of these loans was for a period
of only 3 months in FY2016. As a result of
the redemption of these loans, the Group
also incurred a loan prepayment fee of $0.1
million that was recognised as finance cost.
In addition, short-term interest rates have
increased during the financial year.
Income tax expense
In FY2016, the Group recorded an income
tax expense of $0.2 million, similar to that
incurred in FY2015.
Loss for the year
The Group recorded a loss for the year of
$23.8 million for FY2016 as compared to a
loss of $7.7 million in FY2015.
