Far East Group LimitedSGX: 5TJ

Half Year Financial Results HY 2024

Aug 13, 2024 at 6:22 AM UTC · Issued by Far East Group Limited

UNAUDITED FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE HALF YEAR ENDED 30 JUNE 2024

This announcement has been reviewed by the Company's sponsor, SAC Capital Private Limited (" SPONSOR "). This announcement has not been examined or approved by Singapore Exchange Securities Trading Limited (" SGX-ST " and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made, or reports contained in this announcement.

The contact person for the Sponsor is Ms. Lee Khai Yinn (Telephone: (65) 6232 3210) at 1 Robinson Road, #21-00 AIA Tower, Singapore 048542.

A. CONDENSED INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

	Group
	Unaudited	Unaudited	Change	Change
Notes	1H2024	1H2023	+ve/(-ve)	+ve/(-ve)
	S$'000	S$'000	S$'000	%

Revenue

Cost of sales

Gross profit

Other operating income

Distribution and selling expenses Administrative expenses Reversal of impairment

losses/(impairment losses) on trade and other receivables and contract

Other operating expenses Share of results of associate

Profit/(loss) from operations
Finance expenses
Interest income
Profit/(loss) before tax	6
Tax expense	7

Profit/(loss) for the period

Other comprehensive income Item that may be reclassified

subsequently to profit or loss Foreign currency translation

Total comprehensive income for the period

Profit/(loss) for the period attributable to :- Owners of the Company Non-controllinginterests

44,255	36,928
(35,696)	(30,285)

8,559	6,643
857	1,144

(2,991)	(3,212)
(5,883)	(5,869)

(653)

(368)

(63)

(7,648)	(10,165)
1,768	(2,378)
(1,060)	(1,003)
28	25

736(3,356)

(101)

664(3,457)

289	(542)

953	(3,999)

959(3,453)

(295)(4)

664(3,457)

7,32719.8

(5,411)17.9

1,91628.8

(25.1)

221(6.9)

n.m.

(90.8)

1,008	n.m.
2,517	(24.8)
4,146	n.m.

5.7
312.0

4,092	n.m.
29	(28.7)
4,121	n.m.

831n.m.

4,952n.m.

4,412n.m.

n.m.
4,121n.m.

Total comprehensive income for the period attributable to :-

Owners of the Company

Non-controlling interests

1,224(3,925)

(74)
953(3,999)

5,149n.m.

n.m.
4,952n.m.

Profit/(loss) per share based on loss for the period
attributable to the owners of the Company :
Basic and diluted (cents)	0.86	(3.10)

There were no potential dilutive ordinary shares existing during the respective financial periods.

n.m. : not meaningful

1H: 6 months ended 30 June

B. CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

	Group	Company
	Unaudited	Audited	Unaudited	Audited
Notes	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
	S$'000	S$'000	S$'000	S$'000

Non-current assets

Fixed assets Investment property Intangible assets Right-of-use assets

Right-of-useassets-land use rights Investment in subsidiaries Investment in associates Investment securities

Deferred tax assets

Total non-current assets

Current assets

Inventories Investment securities Trade receivables Contract assets Other receivables Deposits Prepayments

Advance payment to suppliers Amounts due from subsidiaries (trade) Amounts due from subsidiaries (non-trade) Amounts due from associates (trade) Amounts due from associates (non-trade) Tax recoverable

Assets held for sale Fixed deposits

Cash and bank balances

Total current assets

Current liabilities

Trade payables Contract liabilities

Trust receipts and bills payable (secured)

Other payables

Accruals and other liabilities Dividend payable

Amounts due to subsidiaries (trade) Amounts due to subsidiaries (non-trade) Provision for income tax

Lease liabilties (current) Term loans (current) Bank overdraft

Total current liabilities

Net current assets/(liabilities)

24,645	25,391	20,152	20,591
-	44	-	-
188	188	-	-
14,758	14,466	13,898	13,534
1,606	1,622	-	-
-	-	20,570	20,570
9,854	8,910	7,281	7,281
6,719	6,522	-	-
1,513	1,511	-	-

59,283	58,654	61,901	61,976

18,255	15,598	6,267	7,656
1,484	997	1,484	997
14,001	15,585	1,677	1,794
14,954	10,337	136	104
820	965	342	365
403	305	58	55
302	220	49	50
4,219	3,396	1,940	2,610
-	-	2,288	543
-	-	6,949	6,310
76	419	-	-
134	133	-	-
128	22	-	-
102	-	-	-
463	660	213	660
3,294	5,732	995	897
58,635	54,369	22,398	22,041

15,084	9,380	3,445	1,443
3,033	2,503	741	941
9,690	10,863	6,171	7,000
610	902	250	341
10,894	10,442	1,381	2,404
28	27	28	26
-	-	6,017	5,401
-	-	1,492	1,560
73	329	-	-
910	790	573	554
8,105	8,424	5,022	4,224
282	-	-	-

48,709	43,660	25,120	23,894

9,926	10,709	(2,722)	(1,853)

B. CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION (CONT'D)

	Group	Company
	Unaudited	Audited	Unaudited	Audited
Notes	30 Jun 2024	31 Dec 2023	30 Jun 2024	31 Dec 2023
	S$'000	S$'000	S$'000	S$'000

Non-current liabilities

Deferred tax liabilities
Lease liabilities (non-current)
Term loans (non-current)	11
Total non-current liabilities

Net assets

Equity attributable to owners of the Company

Share capital

Retained earnings

Fair value adjustment reserve

Capital reserve

Translation reserve

Non-controlling interests

Total equity

2,091	2,012	-	-
14,378	14,116	14,139	13,716
11,236	12,624	11,236	12,361

27,705	28,752	25,375	26,077
41,504	40,611	33,804	34,046
19,680	19,680	19,680	19,680
18,785	17,826	13,802	14,044
5,134	4,977	-	-
230	230	322	322
(4,208)	(4,316)	-	-

39,621	38,397	33,804	34,046
1,883	2,214	-	-

41,504	40,611	33,804	34,046

C. CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

	Notes
Cash flows from operating activities
Profit/(loss) before tax	E6
Adjustments:
(Reversal of impairment losses)/impairment losses on	E6
trade and other receivables and contract assets

Allowance for obsolete and slow-moving inventories,	E6
Fixed assets written off	E6
(Gain)/loss on disposal of fixed assets, net	E6
Depreciation of fixed assets	E6
Depreciation of right-of-use assets	E6
Net fair value (gain)/loss on held for trading investment securities	E6
Depreciation of right-of-use assets - land use rights	E6
Dividend income from unquoted investment	E6
Finance expenses	E6
Interest income	E6
Share of results of associate	E6

Translation difference

Operating cash flows before working capital changes (Increase)/decrease in:

Inventories

Trade receivables Contract assets Other receivables

Deposits, prepayments and advance payment to suppliers Amounts due from associates (trade)

Increase/(decrease) in: Trade payables Contract liabilities Other payables

Accruals and other liabilities

Cash flows generated from operations Interest paid

Income taxes paid Income taxes refunded Interest income

Net cash flows generated from operating activities

Group

1H2024 1H2023

Unaudited Unaudited

S$'000S$'000

736(3,356)

89	126
4	-
(11)	63
831	848

513481

20	22
-	(310)
1,060	1,003

(25)

(945)63

101(307)

2,040(543)

(2,747)	1,358
1,979	3,575
(4,517)	(2,511)
(39)	284
(1,004)	1,081
163	298
15,394	8,210
529	569

(117)
4522,517

11,95914,721

(733)

(658)

-	34
28	25

10,843	13,389

C. CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D)

	Notes	Group
		1H2024	1H2023
		Unaudited	Unaudited
		S$'000	S$'000
Cash flows from investing activities
Dividends received		196	142
Proceeds from disposal of fixed assets		11	62
Purchase of investment securities		(471)	-
Purchase of fixed assets	10	(127)	(42)
Proceeds from disposal of investment securities		-	498

Net cash flows (used in)/generated from investing activities		(391)	660
Cash flows from financing activities
Bank deposit pledged		200	-
Dividends paid on ordinary shares		-	(223)
Dividends paid to non-controlling interest of a subsidiary		(60)	-
Repayment of trust receipts and bill payables, net		(10,855)	(13,957)
Repayment of lease liabilities		(736)	(683)
Repayment of term loans		(12,242)	(1,565)
Proceeds from term loans		10,526	415

Net cash flows used in financing activities		(13,167)	(16,013)
Net decrease in cash and cash equivalents		(2,715)	(1,964)
Effect of exchange rate changes on cash and cash equivalents		(2)	(18)
Cash and cash equivalents at beginning of period		6,192	5,969

Cash and cash equivalents at end of period		3,475	3,987
Cash and cash equivalents consist of the following :
Cash and bank balances		3,294	4,244
Less: Bank deposit pledged		-	(200)
Less: Bank overdraft		(282)	(266)
Fixed deposits		463	209
		3,475	3,987

D. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY
		Attributable to owners of the Company
	Equity
	attributable
	to owners of
	the			Fair value			Non-
Equity,	Company,	Share	Retained	adjustment	Capital	Translation	controlling
total	total	capital	earnings	reserve	reserve	reserve	interests
S$'000	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000	S$'000

Group
Balance at 1 January 2024	40,611	38,397	19,680	17,826	4,977	230	(4,316)	2,214
Profit/(loss) for the period	664	959	-	959	-	-	-	(295)
Other comprehensive income
Foreign currency translation	289	265	-	-	157	-	108	24
Total comprehensive income	953	1,224	-	959	157	-	108	(271)
Contributions by and
distribution to owners
Dividends paid to
non-controlling interest
of a subsidiary	(60)	-	-	-	-	-	-	(60)

Balance at 30 June 2024	41,504	39,621	19,680	18,785	5,134	230	(4,208)	1,883
Balance at 1 January 2023	48,152	45,675	19,680	21,716	7,455	230	(3,406)	2,477
Loss for the period	(3,457)	(3,453)	-	(3,453)	-	-	-	(4)
Other comprehensive income
Foreign currency translation	(542)	(472)	-	-	40	-	(512)	(70)
Total comprehensive income	(3,999)	(3,925)	-	(3,453)	40	-	(512)	(74)
Contributions by and
distribution to owners
Dividends on ordinary shares	(223)	(223)	-	(223)	-	-	-	-

Balance at 30 June 2023	43,930	41,527	19,680	18,040	7,495	230	(3,918)	2,403

D. CONDENSED INTERIM STATEMENTS OF CHANGES IN EQUITY (CONT'D)
	Attributable to owners of the Company
	Equity
	attributable
	to owners of
	the
Equity,	Company,	Share	Retained	Capital
total	total	capital	earnings	reserve
S$'000	S$'000	S$'000	S$'000	S$'000

Company
Balance at 1 January 2024	34,046	34,046	19,680	14,044	322
Loss for the period,
representing total
comprehensive
income for the period	(242)	(242)	-	(242)	-
Balance at 30 June 2024	33,804	33,804	19,680	13,802	322	-
Balance at 1 January 2023	37,609	37,609	19,680	17,607	322
Loss for the period,
representing total
comprehensive
income for the period	(1,868)	(1,868)	-	(1,868)	-
Contributions by and
distribution to owners
Dividends on ordinary shares	(223)	(223)	-	(223)	-
Balance at 30 June 2023	35,518	35,518	19,680	15,516	322

E. NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. Corporate Information

Far East Group Limited (the "Company") is incorporated and domiciled in Singapore and whose shares are publicly traded on the Catalist of the Singapore Exchange. These condensed interim consolidated financial statements as at and for the six months ended 30 June ("1H") 2024 comprise the Company and its subsidiaries (collectively, the "Group"). The principal activities of the Company consist of manufacturing and trading of refrigeration parts, servicing of cold rooms, construction and installation of commercial and industrial cold rooms and all other incidental business of refrigeration.

2. Basis of Preparation

The condensed interim financial statements for 1H2024 have been prepared in accordance with SFRS(I) 1-34 Interim Financial Reporting issued by the Accounting Standards Council Singapore. The condensed interim financial statements do not include all the information required for a complete set of financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance of the Group since the last annual financial statements for the year ended 31 December 2023 ("FY2023").

The accounting policies adopted are consistent with those of the previous financial year which were prepared in accordance with Singapore Financial Reporting Standards (International) ("SFRS(I)s"), except for the adoption of new and amended standards as set out in Note 2.1.

The condensed interim financial statements are presented in Singapore dollar which is the Company's functional currency.

The financial information contained in this announcement has neither been audited nor reviewed by the auditors.

2.1. New and amended standards adopted by the Group

The Group has adopted all the new and amended standards which are relevant to the Group and are effective for annual financial periods beginning on or after 1 January 2024. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting those standards.

2.2. Use of judgements and estimates

The preparation of the Group's consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

2.2.1 Judgements made in applying accounting policies 2.2.1a Income taxes

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the Group's regional business relationships and the nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax provisions already recorded.

The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the relevant tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group's domicile.

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the timing and level of future taxable profits together with future tax planning strategies.

As at 30 June 2024, the carrying amounts of the Group's tax recoverable, provision for income tax, deferred tax assets and deferred tax liabilities amounted to S$128,000 (31 December 2023: S$22,000), S$73,000 (31 December 2023: S$329,000), S$1,513,000 (31 December 2023: S$1,511,000) and S$2,091,000 (31 December 2023: S$2,012,000) respectively.

2.2.1b Assessment of classification of unquoted investment security

The Group holds 30% equity interest in its unquoted investment security. The Group does not participate in the operating and financing decision process, fails to obtain representation on the board of directors and is unable to obtain timely or adequate financial information required to apply equity method. Based on these facts and circumstances, management concludes that the Group cannot exert a significant influence in its unquoted investment security and classifies this investment as financial instrument carried at fair value through other comprehensive income.

2.2.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period are discussed below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

2.2.2a Impairment of non-financial assets

An impairment exists when the carrying value of an asset or cash-generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the forecast for the next five years. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes.

As at 30 June 2024, the carrying amounts of the Company's investments in subsidiaries S$20,570,000 (31 December 2023: S$20,570,000).

2.2.2b Expected credit losses ("ECL") for trade receivables and contract assets

The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. For trade receivables and contract assets, the provision rates are based on days past due for groupings of various customer segments that have similar loss patterns.

The provision matrix is initially based on the Group's historical observed default rates. The Group will calibrate the matrix to adjust historical credit loss experience with forward-looking information. At every reporting date, historical default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group's historical credit loss experience and forecast of economic conditions may also not be representative of customer's actual default in the future.

As at 30 June 2024, the carrying amounts of the Group's and Company's trade receivables and contract assets, including balances with subsidiaries and associates amounted to S$29,031,000 (31 December 2023: S$26,341,000) and S$4,101,000 (31 December 2023: S$2,441,000) respectively.

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