16
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
OPERATIONS
& BUSINESS REVIEW
i. The Marine & Offshore segment showed
a profit before tax of $18,320. Due to the
prolonged weakness in oil prices and
its impact on the industry, impairment
charges incurred amounted to $2.3
million. Excluding the effects of these
impairment charges of $2.3 million and
adding back the amount of revaluation
reserve transferred to retained earnings
upon disposal of the property at 47 Tuas
Avenue 9 amounting to $9.7 million, the
Marine & Offshore segment would have
an underlying profit of $12.0 million; and
ii. The Property Development segment
incurred loss before tax of $22.8
million. Faced with unfavourable macro-
economic outlook in the condominium
sector in Phnom Penh and the lackluster
property market landscape in Singapore,
the Group incurred impairment charges
amounting to $16.4 million. Excluding the
effects of these impairment charges of
$16.4 million, the Property Development
Segment would have an underlying loss
of $6.4 million.
Combining the underlying profit before tax
of $12.0 million for the Marine & Offshore
segment, underlying loss before tax of
$6.4 million for the Property Development
segment, and the unallocated head office
expenses of $0.9 million, the underlying
profit before tax of the Group is $4.7 million.
Balance Sheet Review
Non-current assets
Non-current assets decreased by $32.1
million or 54.7% to $26.6 million as at 30
June 2016 from $58.7 million as at 30 June
2015. The decrease is mainly due to the
following:
• Intangible assets decreased by $17.5
million due to amortisation and
impairment charges.
• Property,
plant
and
equipment
decreased by $14.5 million, mainly due
to the disposal of the Group’s leasehold
property at 47 Tuas Avenue 9, which had
a carrying amount of $13.2 million as at
30 June 2015.
• Investment in associates decreased by
$0.1 million as a result of impairment to
the investment in associates.
Current assets
Current assets decreased by $10.5 million
or 10.3% to $91.3 million as at 30 June
2016 from $101.8 million as at 30 June
2015. The decrease is due to the following
(the amounts below do not add up due to
rounding):
• Inventories decreased by $1.4million. The
Group reduced its inventory levels mainly
due to the disposal of one of its leasehold
properties used to store inventories.
• Development properties reduced by $1.9
million due to the impairment loss on its
development properties relating to “The
Bay” project in Cambodia and the sale
of one of its units of the Urban Heritage
development project in Singapore.
• Trade and other receivables declined by
$1.3 million. Turnover days for trade and
other receivables remained stable at 104
days in FY2016 and FY2015.
• Cash and cash equivalents, including
the effect of exchange rate fluctuations
on cash held, decreased by $5.9 million.
Please refer to the “Cash Flows Review”
section below for details.
Non-current liabilities
Non-current liabilities decreased by $10.2
million or 30.0% to $23.8 million as at 30
June 2016 from $34.0 million as at 30 June
2015. The decrease is due to the following:
• Non-current portion of loans and
borrowings decreased by $7.3 million.
The non-current portion of the loans
and borrowings redeemed following
the disposal of the Group’s leasehold
property at 47 Tuas Avenue 9 amounted
to $8.7 million. The repayment of other
borrowings reduced the non-current
portion of loans and borrowings by a
further $1.1 million. These decreases
were offset by a $1.8 million drawdown
of a construction loan for the Group’s
development property in Singapore and
the reclassification of current portion
of loans and borrowings as non-current
amounting to $0.7 million.
• Deferred tax liabilities decreased by $2.9
million mainly due to the effects of the
disposal oftheGroup’s leaseholdproperty
at 47 Tuas Avenue 9, and amortisation
and impairment of intangible assets.
