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Financials

Second Quarter Financial Statement and Dividend Announcement 2017

Financials Archive

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Consolidated statement of comprehensive (loss)/income (for the Group) together with a comparative statement for the corresponding period of the immediately preceding financial year.

Financials

Balance Sheet

Financials

Review of Performance

Commentary on the Consolidated Statement of Profit or Loss and Other Comprehensive (Loss)/Income

Statement of Profit or Loss

The net other losses was S$1.89 million for 2Q2017 (2Q2016: net other gains of S$0.28 million) and S$1.74 million for 1H2017 (1H2016: net other gains of S$1.64 million) mainly comprise of:

  1. loss on strike-off of a dormant subsidiary of $1.87 million for 2Q2017 and 1H2017 (2Q2016 and 1H2016: Nil);
  2. net fair value loss on financial assets, at fair value through profit or loss of S$0.05 million for 2Q2017 (2Q2016: S$0.05 million) and net fair value gain on financial assets, at fair value through profit or loss of S$0.05 million (1H2016: net fair value loss of S$0.52 million). The reported fair value (loss)/gain arose from the mark-to-market adjustment of the value of the quoted financial assets, at fair value through profit or loss based on market bid prices on the securities held. The quoted financial assets, at fair value through profit or loss comprised of a portfolio of equity investments in companies listed in the Singapore Exchange;
  3. net currency exchange gain of S$0.03 million for 2Q2017 (2Q2016: S$0.01 million) and S$0.05 million for 1H2017 (1H2016: S$1.98 million);
  4. interest income of S$1,000 for 2Q2017 (2Q2016: S$0.08 million) and S$1,000 for 1H2017 (1H2016: S$0.15 million) attributed to the assignment of loan receivable as a result from the repayment of loan from Wintercrest Advisors LLC ("Wintercrest Loan") in accordance with Settlement Agreement with Wintercrest Advisors LLC ("Wintercrest") completed on 25 November 2016;
  5. claims amounting to S$0.11 million (being two out of five equal installments) received from Prospect Resources Limited following the announcement made by the Company on 15 August 2015 which was recognised in 2Q2016 and 1H2016. No such income in 1Q2017 and 1H2017;
  6. write-off of other payables of S$0.12 million in 2Q2016 and 1H2016 following settlement agreement between the Consortium and following the claims received from Prospect Resources Limited. No such income in 2Q2017 and 1H2017; and
  7. loss on conversion of debt instrument to equiry, available-for-sale of S$0.06 million for 1H2016. No such losses incurred in 1H2017.

Raw materials and consumables used increased by S$5,000 or 24% from S$21,000 for 2Q2016 to S$26,000 for 2Q2017 due to increase in raw material prices in 2Q2017. Despite the increase in raw material prices in 2Q2017, the raw materials and consumables used had slightly decreased by S$0.01 million or 19% from S$0.05 million for 1H2016 to S$0.04 million for 1H2017 creditable to overall lower raw material prices throughout 1H2017.

Employee benefits increased by S$4.10 million or 100% from S$0.47 million for 2Q2016 to S$4.57 million for 2Q2017 and increased by S$4.06 million or 100% from S$0.93 million for 1H2016 to S$4.99 million for 1H2017 was mainly due to shares allotted and issued pursuant to Blumont PSP by the Company in 2Q2017.

Other expenses decreased by S$2.20 million for 2Q2017, from S$2.76 million for 2Q2016 to S$0.56 million for 2Q2017 and decreased by S$3.60 million for 1H2017, from S$4.70 million for 1H2016 to S$1.09 million for 1H2017 was mainly due to decrease in:

  1. administration and professional fees in relation to loan from Wintercrest Advisors, LLC ("Wintercrest Loan") by S$1.31 million for 2Q2017 as compared to 2Q2016 (2Q2017: S$3,000; 2Q2016: S$1.31 million) and S$2.51 million for 1H2017 as compared to 1H2016 (1H2017: S$4,000; 1H2016: S$2.51 million);
  2. bad debts written off by S$0.08 million for 2Q2017 and 1H2017 as compared to 2Q2016 and 1H2016 (2Q2017 and 1H2017: Nil; 2Q2016 and 1H2016: S$0.08 million);
  3. other professional and consultancy fee by $0.29 million for 2Q2017 as compared to 2Q2016 (2Q2017: S$0.01 million; 2Q2016: S$0.30 million); and
  4. write-back of provision for withholding tax expenses of S$0.10 million for 2Q2017 and 1H2017 as compared to 2Q2016 and 1H2016 respectively (2Q2016: provision for withholding tax expenses of S$0.51 million; 1H2016: provision for withholding tax expenses of S$0.76 million).

Impairment loss on financial assets, available-for-sale of S$2,000 for 2Q2017 (2Q2016: Write-back of impairment loss on financial assets, available-for-sale of S$0.07 million) and S$4,000 for 1H2017 (1H2016: S$5.55 million) were attributed to the assignment of asset as a result from repayment of Wintercrest Loan in accordance with Settlement Agreement with Wintercrest completed on 25 November 2016. The adjustment to impairment losses recognised was due to "significant" or "prolonged" decline in the fair value in 1Q2017 of the equity investments classified as financial assets, available-for-sale.

Finance cost decreased by S$1.31 million from S$1.31 million in 2Q2016 to S$1,000 in 2Q2017, and decreased by S$2.50 million from S$2.50 million in 1H2016 to S$1,000 in 1H2017. The decrease was due to repayment of Wintercrest Loan completed on 25 November 2016.

Dilution loss on investment in an associate of S$0.35 million for 2Q2016 and 1H2016 pertains to reclassification from "Impairment loss on investment in an associate" for dilution adjustment on shareholding of investment in an associate. The associate was disposed in accordance with Settlement Agreement with Wintercrest completed on 25 November 2016.

The Group determines whether there is any objective evidence that the investment in an associate is impaired at end of each reporting period. Reclassification of impairment loss on investment in an associate of S$0.35 million to dilution loss on investment in an associate for 2Q2016 and 1H2016 pertains to adjustment of the Group's recoverable value on shareholding dilution of investment in an associate. The associate was disposed in accordance with Settlement Agreement with Wintercrest completed on 25 November 2016.

Income tax credit of S$10,000 for 2Q2017 (2Q2016: S$4,000) mainly pertains to deferred tax liabilities recognised for taxable temporary difference and accrual incurred.

Income tax credit of S$24,000 for 1H2017 (1H2016: S$8,000) mainly pertains to deferred tax liabilities of S$25,000 for 1H2017 (1H2016: S$9,000) recognised for taxable temporary differences for depreciation and accruals incurred in accordance with FRS12 Income taxes.

Other Comprehensive Loss

Foreign currency translation loss on translating foreign operations of S$0.03 million for 2Q2017 (2Q2016: S$0.17 million) and S$0.26 million for 1H2017 (1H2016: foreign currency translation gain of S$0.11 million) relates to the translation of the results and the net assets of the Group's foreign operations from their functional currencies to the Group's presentation currency in accordance with FRS 21 The Effects of Changes in Foreign Exchange Rate.

Foreign currency translation loss reclassified to profit or loss of S$0.91 million for 2Q2017 and 1H2017 (2Q2016 and 1H2017: Nil) was due to strike-off of a dormant subsidiary.

Net changes in fair value of financial assets, available-for-sale was S$0.76 million for 2Q2016 and for 1H2016. Net changes in fair value of financial assets, available-for-sale was due to recognition of unrealised fair value changes from the mark-to-market adjustment of the value of the portfolio of the quoted investments listed in the Australian Securities Exchange.

The Group reclassified S$0.04 million of net fair value loss of financial assets, available-for-sale to profit or loss for 2Q2016 and S$1.34 million cumulative gain of financial assets, available-for-sale to profit or loss for 1H2016 as there were "significant" or "prolonged" decline in the fair value in 1H2016 of the equity investments, classified as financial assets, available-for-sale.

Commentary on the Statement of Financial Position

Cash and bank balances increased by S$0.34 million or 69% from S$0.50 million as at 31 December 2016 to S$0.84 million as at 30 June 2017. The increase was mainly due to the Group drawndown a credit facility of approximately S$1.04 million, offset by payment of withholding tax of S$0.20 million and operating expenses during the period.

Financial assets, at fair value through profit or loss increased by S$0.06 million or 41% from S$0.13 million as at 31 December 2016 to S$0.19 million as at 30 June 2017. The increase in financial assets, at fair value through profit or loss was mainly due to mark-to-market adjustment of quoted equity shares held with additional net gain of S$0.05 million. Financial assets, at fair value through profit or loss were stated at their fair value based on their quoted bid prices at the end of each reporting period.

Other current assets increased by S$0.09 million or 23% from S$0.37 million as at 31 December 2016 to S$0.46 million as at 30 June 2017 was mainly due to increase in prepayment of S$0.11 million and offset against the decrease in deposit of S$0.02 million.

Financial assets, available-for-sale decreased by S$0.03 million or 97% from S$0.03 million as at 31 December 2016 to S$1,000 as at 30 June 2017 was mainly due to disposal of quoted equity investments of S$28,000 and allowance of impairment for financial assets, available-for-sale of S$4,000 recognised in the profit or loss. Financial assets, available-for-sale were stated at their fair value based on their quoted bid prices at the end of each reporting period.

Current and non-current borrowings increased by S$1.03 million from S$0.08 million as at 31 December 2016 to S$1.11 million as at 30 June 2017 was mainly due to the Groups drawdown of credit facility during the period.

Commentary

The performance of the sterilisation segment of the Group has been consistent. Barring any unforeseen circumstances, we do not expect any substantial variation in its performance.

The Group's investment holding segment including quoted equity investment classified as the portfolio of quoted financial assets, available-for-sale, including the portfolio under the mineral and energy resources ties to the changes in the financial market and global economy with uncertainty and volatility in the investment outlook. The mineral and energy resources segment is a highly risky business and requires time, effort, investment and development.

To-date, the following legal proceeding is still pending:

Updates on Legal Proceeding in relation to Raintree Rock Sdn Bhd ("Raintree")

On 26 April 2016, the Company announced via SGXNET that Raintree, a wholly owned subsidiary of Blumont Group Ltd., had been notified that it had on 22 April 2016, been served with a writ of summons and state of claim filed in the high court of Malaya in Kuala Lumpur to take steps to effect rectification of the strata title to the property, an order for specific performance by Raintree, subject to the Court varying certain terms of the Agreement dated 15 September 2015 for the sale of a property in Kuala Lumpur, including the purchase price, or, in lieu of specific performance, a refund of deposits paid by the Plaintiffs, together with liquidated damages of RM600,000 and damages for misrepresentation.

The Group is currently seeking legal advice and will, in consultation with its solicitors, take such necessary steps to defend the Legal Proceedings. The Group reserves all its rights on the matter. The Company will disclose any updates or further information on the legal proceedings when it is appropriate to do so.