TeleChoice International : Financial Statements And Related Announcement - First Quarter Results

In S$'000	1Q2017	1Q2016	+/- %
Revenue	113,434	133,936	-15.3%
Cost of sales	(105,972)	(124,911)	-15.2%
Gross profit (Note 1a)	7,462	9,025	-17.3%
Gross margin % (Note 1b)	6.6%	6.7%	-0.1ppt
Other income (Note 2)	181	419	-56.8%
Selling and marketing expenses	(2,612)	(2,847)	-8.3%
Administrative expenses	(4,181)	(4,298)	-2.7%
Other expenses (Note 3)	(83)	(265)	-68.7%
Net finance costs (Note 4)	(151)	(179)	-15.6%
Operating profit before income tax	616	1,855	-66.8%
% of revenue	0.5%	1.4%	-0.9ppt
Share of profit of an associate (net of tax) (Note 5)	22	-	nm
Profit before income tax	638	1,855	-65.6%
% of revenue	0.6%	1.4%	-0.8ppt
Income tax expense (Note 6)	(252)	(661)	-61.9%
Profit for the period	386	1,194	-67.7%
Attributable to:
Equity holders of the Company	387	1,195	-67.6%
% of revenue	0.3%	0.9%	-0.6ppt
Non-controlling interests	(1)	(1)	-
386	1,194	-67.7%
Weighted average number of shares (in '000)	455,945	454,422
Earnings per share (in cents)
Basic	0.08	0.26
Diluted	0.08	0.26

PART I - UNAUDITED RESULTS FOR THE 1ST QUARTER ENDED 31 MARCH 2017 1(a)(i) INCOME STATEMENT FOR THE 1ST QUARTER ENDED 31 MARCH 2017 STATEMENT OF COMPREHENSIVE INCOME FOR THE 1ST QUARTER ENDED 31 MARCH 2017

In S$'000	1Q2017	1Q2016	+/- %
Profit for the period	386	1,194	-67.7%
Items that may be reclassified subsequently to profit or loss:
Translation differences relating to financial statements of foreign
subsidiaries	(286)	285	nm
Share of foreign currency translation differences of associate	(15)	-	nm
Exchange differences on monetary items forming part of net
investment in foreign operations	(183)	(78)	134.6%
Total comprehensive income for the period	(98)	1,401	-107.0%
Attributable to:	(97)	1,402	-106.9%
Equity holders of the Company
Non-controlling interests	(1)	(1)	-
Total comprehensive income for the period	(98)	1,401	-107.0%

nm - not meaningful

1(a)(ii) PROFIT AFTER TAXATION HAS BEEN ARRIVED AT AFTER CHARGING/(CREDITING):

In S$'000	1Q2017	1Q2016	+/- %
Staff costs	12,265	11,545	6.2%
Provision of directors' remuneration, included in staff costs	130	130	-
Depreciation of property, plant and equipment	556	522	6.5%
Amortisation of intangible assets (Note 7)	127	149	-14.8%
Provision for bad debts and bad debts written off/(back) (Note 8)	(38)	10	nm
Exchange loss/(gain) (Note 9)	-	193	nm
Write (back)/down of inventories to net realisable value (Note 10)	87	(386)	- 122.5%
Adjustments for under provision of tax in respect of prior years (Note
11)	5	28	-82.1%

Notes:

(1a) In 1Q2017, all business divisions reported lower gross profit against previous period. (1b) In 1Q2017, Engineering division reported lower gross margins against previous period.

1. Lower other income in 1Q2017 was attributed to lower government grants under the wage credit scheme.

2. Lower other expenses were due to lower net exchange losses in 1Q2017.

3. Lower net finance cost in 1Q2017 was mainly due to lower level of borrowings resulting in lower interest expenses.

4. The Company's wholly-owned subsidiary, NxGen Communications Pte Ltd ("NxGen"), had on 16 May 2016 acquired an approximate 25.19% stake in MVI. MVI became an associate of NxGen with effect from 16 May 2016.

5. Lower income tax expense in 1Q2017 was due to lower profits.

6. Lower amortisation in 1Q2017 was due to lower purchases of intangible assets.

7. Write back of bad debts in 1Q2017 was attributed to ICT customers.

8. In 1Q2017, exchange gain due to the weakening of USD against SGD on USD payables was offset by the exchange loss due to the weakening of Ringgit against SGD on Ringgit receivables. Net exchange loss in 1Q2016 arose mainly from USD receivables and bank balances due to the weakening of USD against SGD.

9. In 1Q2017 there were higher inventories provision due to higher stock balances held. In 1Q2016, there were reversal of inventories provision for mobile phones which have been sold.

10. Adjustments for the under provision of tax in 1Q2017 and 1Q2016 were due to the differences in final tax assessment and tax estimates made in prior year.

1(b)(i) STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2017

In S$'000	Group		Company
	31/03/2017	31/12/2016	31/03/2017	31/12/2016
Non-current assets Subsidiaries Associate Property, plant and equipment Intangible assets Deferred tax assets Trade and other receivables Current assets Inventories Work-in-progress Trade and other receivables Cash and cash equivalents Total assets Equity Share capital Other reserves Accumulated profits Equity attributable to equity holders of the Company Non-controlling interests Total equity Non-current liabilities Deferred tax liabilities Loans and borrowings Trade and other payables Current liabilities Trade and other payables Excess of progress billings over work- in-progress Provision for warranties Current tax payable Loans and borrowings Deferred revenue Total liabilities Total equity and liabilities	-	-	37,991	37,659
	2,238	2,231	-	-
	3,431	3,639	354	415
	12,404	12,448	80	122
	810	600	-	-
	4,317	4,422	-	-
	23,200	23,340	38,425	38,196
	21,961	15,874	19,136	12,904
	22,895	24,972	-	-
	63,615	58,862	25,112	21,628
	41,140	48,870	17,151	19,693
	149,611	148,578	61,399	54,225
	172,811	171,918	99,824	92,421
	21,987	21,987	21,987	21,987
	8,668	9,053	13,476	13,377
	44,631	44,244	14,878	14,236
	75,286	75,284	50,341	49,600
	299	6	-	-
	75,585	75,290	50,341	49,600
	-	-	45	45
	4,993	4,992	4,993	4,992
	3,170	3,354	-	-
	8,163	8,346	5,038	5,037
	72,062	75,575	44,266	37,517
	126	51	-	-
	204	205	3	3
	833	781	176	264
	9,775	7,116	-	-
	6,063	4,554	-	-
	89,063	88,282	44,445	37,784
	97,226	96,628	49,483	42,821
	172,811	171,918	99,824	92,421

1(b)(ii) GROUP BORROWING In S$'000	As at 31/03/2017	As at 31/12/2016
Amount repayable in one year or less
Bank loan - unsecured	9,775	7,116
Amount repayable after one year Bank loan - unsecured	4,993	4,992
Total	14,768	12,108
Details of any collateral
Nil