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Financials
Unaudited First Quarter Financial Statement Annoncement for Financial Period Ended 31 March 2008Income Statement
Balance Sheet
Review Of Performance
Financial results
The Group's revenue increased slightly by about 3% from S$39.6 million in Q1 2007 to S$ 40.8 million in Q1 2008. The increasement mainly attributed to Group's hydropower plant operations and sales of power related products. Xinbao continued to be the main revenue generator of the Group, contributing 82.3% of Group revenue.
Compared to Q1 2007, gross profit improved by 13.4%, mainly due to higher revenue from hydropower plant operations and sales of power related products which both enjoy higher gross profit margin.
Other operating income increased from $515,000 in Q1 2007 to $759,000 in Q1 2008, this was mainly due to foreign exchange gain amounting to $362,000 in Q1 2008.
Administrative expenses increased by S$0.4 million or 25.6% to S$2.3 million in Q1 2008 compared to S$1.8 million in Q12007. This was mainly due to additional expense incurred for water pollution treatment related expenses in Xinbao and higher operating expenses in hydropower plants which was in line with higher revenue generated in the reporting period.
Other operating expenses incurred in Q1 2007 were largely due foreign exchange loss amounting to $246,000, compare to a foreign exchange gain in Q1 2008.
Finance costs increased by 12.9% in Q1 2008 compared to Q1 2007. The increase was mainly due to higher interest rate charged for bank borrowings.
Income tax expenses increased by 37.1% from $703,000 to $964,000, this was mainly due to an income tax rate increased from 15% to 18% in Xinbao.
As a result of the above fluctuations, net profit attributable to shareholders of the Company increased by 16.3% to S$3.0 million in Q1 2008 as compare to S$2.6 million in Q1 2007.
Balance Sheet and cash flow
Cash and bank balances increased from S$28.1 million as at 31 Dec 2007 to S$37.5 million, this was mainly due to S$13.2 million cash received from issuing new placement shares.
Held-for-trading investment increased from S$99,000 to S$2,657,000 was due to one of subsidiaries making short-term investment in quoted equity.
The increased investment in associates was due to the sharing of associates' result for the period, net of dividends declared.
Trade payable increased from S$24.1 million at 31 December 2007 to S$33.0 million as at 31 March 2008. The increased in trade payable was mainly attributable to longer credit period from suppliers obtained by Xinabao.
Other payable as at 31 March 2008 were reduced to $23.3 million from $29.7 million as at 31 December 2007 resulted from a loan repayment of $4.0 million to an associated company and $2.4 million settlement of non-trade accounts.
Bank borrowings decreased by $2.0 million as at 31 Mach 2008 as compared to 31 December 2007 was due to repayments made during the financial period.
Share capital rose from S$39.5 million to S$52.8 million as resulted of Group's 40 million placement shares issued at S$ 0.33 each shares and shares issued upon employee share options exercised.
Commentary On Current Year Prospects
With our successful placement of 40 million shares to Renewable Energy Holdings Private Limited on 6 February 2008, the Group is well poised to strengthen our financial strength to increase effective interest in Asia Power (Leibo) Hydroelectricity Co., Ltd, a subsidiary of the Company. In addition, these proceeds can also lend support to the Group's general working requirements.
With regards to the earthquake in China, the Group wishes to advise that the operations of its power plants are unaffected and all of its personnel are safe. To date, operations are running smoothly and the Group does not expect any significant damage or disruption to be caused to its operations due to this earthquake. Nonetheless, the Group will continue to closely monitor the situation and update shareholders via announcements when necessary.
The Group believes the above mentioned factors will be positive and barring any unforeseen circumstances, the Group expects to remain profitable for the year.
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