02
TEHO INTERNATIONAL INC LTD.
Annual Report 2016
CHAIRMAN’S
STATEMENT
We believe our
approach of upholding
excellence, delivering
high reliability and
service quality to
our customers, and
maintaining a strong
enterprising spirit will
ensure our resilience
and lead us towards
the next 30 years.
Lim See Hoe
Executive Chairman & CEO
More significantly, the performance of
our Property Development segment was
affected by an impairment charge of $16.4
million in FY2016, resulting in an overall
loss before tax of $22.8 million. In reviewing
the condominium sector in Phnom Penh,
Cambodia, where The Bay development is
based, the Group has decided to put on hold
this residential project due to a heightened
risk of oversupply of condominiums in
Phnom Penh, possibly stretching to 2018.
This led to an impairment loss of goodwill
attributable to our subsidiary, ECG Property
Services Pte. Ltd. Excluding the effects
of impairment charges, the Property
Development segment would have recorded
an underlying loss before tax of $6.4 million.
On an aggregate basis, the Group recorded
a full year loss before tax of $23.7 million
for FY2016 compared to a loss before tax of
$7.5 million for FY2015. However, if we were
to consider the underlying profit before tax
of $11.9 million for the Marine and Offshore
segment, the underlying loss before tax of
$6.4 million for the Property Development
segment, and the unallocated head office
expenses of $0.9million, the Group achieved
underlying profit before tax of $4.6 million.
Dear Shareholders,
On behalf of the Board of Directors (“Board”)
of TEHO International Inc Ltd. (“TEHO” or
the “Group”), it is my pleasure to present to
you the annual report for the financial year
ended 30 June 2016 (“FY2016”).
FY2016 continued to be a difficult year due
to market uncertainty, volatility in crude oil
prices and fears over Brexit. Coupled with
tough market conditions prevailing in the
Singapore and Cambodian property sector,
the Group also experienced downward
pressure on its sales and profitability.
2016 Financial Review
Consequently, TEHO ended the financial
year with a lower total Group revenue of
$57.4 million, a decrease of $4.3 million from
$61.7 million for the financial year ended
30 June 2015 (“FY2015”). Our gross profit
was $17.9 million in FY2016, representing
a slight decrease of 4.3% or $0.8 million
from $18.7 million in FY2015.
Our Marine & Offshore business also saw
a decline in revenue of $3.3 million to
$52.3 million in FY2016 compared to $55.6
million in FY2015. In addition, the Marine
and Offshore segment recognised an
impairment charge of $2.2 million mainly
due to the prolonged weakness in oil prices
and its impact on the industry. However,
taking into account the $9.7 million in the
realised revaluation reserve following our
disposal of a leasehold property in Tuas, our
Marine and Offshore segment recorded an
underlying profit before tax of $11.9 million.
Due to weak market sentiments, our
Property Development segment registered
a dip in revenue of $0.9 million or 15.0%,
from $6.0 million in FY2015 to $5.1 million in
FY2016. The decline in revenue was mainly
a result of reduced revenue contribution
from TIEC Holdings Pte. Ltd. (“TIEC”),
a property development company that
the Group acquired in 2014. With property
cooling measures in Singapore still in place,
the private residential property market in
Singapore remained subdued during FY2016.
