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Extracted from Annual Report 2019

Dear Shareholders,

Despite the challenging and competitive business environment, the Group is able to grow its revenue by 20% to $117.2 million for the 12 months ended 30 June 2019 ("FY2019"), as compared to $97.7 million posted in the previous financial year ("FY2018"); and achieve profit before tax of $5.8 million in FY2019, as compared to $1.4 million in FY2018.

Performance Review

The Group's revenue improved in FY2019, mainly due to higher contributions from the Heavy Lift and Haulage segment as more heavy lift and haulage projects were executed in Singapore and Brunei.

The Heavy Lift and Haulage segment remained our largest revenue contributor, accounting for 90% of the Group's revenue. Geographically, Singapore remained the main contributor, accounting for 75%, followed by Brunei which contributed 8%.

As a result, gross profit increased to $35.2 million in FY2019 from $25.4 million in FY2018. Gross profit margin improved from 26% in FY2018 to 30% in FY2019, mainly due to better performance from the Heavy Lift and Haulage; and Marine Transportation segments.

The Group recorded other losses of $0.5 million in FY2019 as compared to other gains of $0.4 million in FY2018. This was mainly attributable to the lower gain on disposal of plant and equipment and higher operational exchange loss. The Group recorded a net impairment loss on receivables of $1.8 million in FY2019 as compared to net impairment loss written back on receivables of $1.2 million in FY2018. Other operating expenses were $24.0 million in FY2019, an increase of $2.2 million or 10% from $21.8 million in FY2018. This was mainly due to increase in manpower costs and utility charges; and the absence of bad debt recovered in FY2019.

The Group recorded a net profit attributable to shareholders of $2.9 million in FY2019, as compared to $1.2 million in FY2018.

The Group's shareholder funds as at 30 June 2019 was $252.3 million, translating to net asset value per share of $1.09. With careful management of its working capital needs, cash flows generated from operating activities was $32.5 million.

Staying Steadfast And Powering Forward

The Group has been constantly upgrading its fleets' capacity and exploring ways to be more efficient by providing integrated solutions for its clients to meet their heavy lifting and job requirements. In the current financial year, the Group has ordered a Boom Booster kit for its Demag CC8800-1 crawler cranes which will increase the current 1,600 tonne to up to 2,000 tonne lifting capability. The Boom Booster kit will enhance the performance significantly and improve the cost effectiveness of the Group's existing three units of CC8800-1 crawler cranes. It will be used primarily for refinery upgrade projects in the region. In addition, as there is growing demand for pre-cast and pre-fabricated pre-finished volumetric construction by building projects in Singapore, the Group has upgraded its tower cranes fleet with new capacity equipment of up to 64 tonne for its secured contracts.

The Group remains committed to effectively managing operating costs and business risks to stay competitive. The Group will continue to focus on its core businesses in the Heavy Lift and Haulage; and Marine Transportation segments, consolidate its resources and streamline its operations.

The Group believes that its capabilities and strong track record as a one-stop integrated services provider in project management for heavy lift and haulage; and marine transportation will help it overcome any challenging and difficult situations; and capture business opportunities.

Rewarding Shareholders

The Group's shareholders remained steadfast in their support for the Group in FY2019. The Board of Directors has proposed a final exempt dividend of 0.2 Singapore cent per share for FY2019, subject to approval by shareholders at the Annual General Meeting on 25 October 2019.

Note of Appreciation

On behalf of the Board of Directors, I would like to express my deepest gratitude to our customers, business associates and banks for your unwavering support and trust in the Group. I would like to express my heartfelt thanks to our management and staff for their commitment and dedication to the Group.

Lastly, I would like to thank all shareholders for your continued confidence and support for the Group. The Group will work hard towards greater success in the years ahead and deliver lasting value to its stakeholders.

Thank you.

Yours sincerely,
Mr Ang Kah Hong
Executive Chairman and Managing Director