It is my pleasure to report to you in our annual report for the financial year ended 31 December 2011. Globally, the instability of economic recovery continued from a year on with high unemployment rates in the developed countries and sovereign debt problems in Europe, while emerging markets grow almost unabated. The resultant volatility of United States (“US”) dollar and commodity price also continue to have an effect on the Group’s operating costs.
Closer to home, the unusual weather pattern in Indonesia and some disruptions along the transport route affected the output of the mines which the Group serves. Consequently, the volume of coal transported for our long term customer has seen a significant reduction during the financial year ended 31 December 2011 (“FY2011”). For FY2011, the Group recorded a net loss attributable to the equity holders of the Company of approximately S$11.4 million, against a profit of S$0.5 million for 2010. Revenue decreased 11.7% to S$27.2 million from last year’s S$30.8 million.
During the financial year ended 31 December 2011, the Group took on two investment opportunities with an aim to diversify our revenue base. In China, the Group has successfully acquired a parcel of land for mixed commercial development in Yingzhou District, Ningbo in Zhejiang Province through a 51% owned subsidiary company, Manhattan Resources (Ningbo) Property Co., Ltd (“MRN”). The project is now in the design and planning stage and in preliminary discussion with various authorities and potential hotel groups on the building plans. We are positive about the long term prospects of the Chinese economy and are optimistic that our premier commercial development in the vibrant Yangtze Delta will bring long term benefits to the Group.
The Company has also invested in Eco Building Products, Inc. (“EcoB”), a US company which manufactures and distributes treated lumber products as building materials. Armed with its patent pending proprietary lumber coating technology, EcoB is currently establishing its foothold in the treated lumber and construction business amidst the growing confidence in the US housing market.
Going forward, the Group will monitor closely the performance of our investment projects to ensure seamless execution and safeguard shareholders’ interest.
With marine transportation remaining as our core business, efforts have been and will continue to be made to improve the shipping operations and fl eet utilisation. The Group continues its fl eet renewal process, including the sale of older and lower specifi cation vessels and the addition of newer and more sophisticated vessels. A renewed and enlarged fl eet size will help us to meet the increasing demand of our long term contract customer who will see increased mine output at both its existing and new mine concessions in the years to come.
The Group’s financial position remains healthy with a cash balance of S$82.3 million and zero gearing as at end of 2011. To optimise our capital structure, we are exploring utilising of our internal funds or leveraging on our existing assets to obtain new sources of funding to meet the Group’s capital expenditure requirements and expansion plans.
Towards the end of FY2011, our Board has also been reorganised for future growth. On behalf of the Board, I express our sincere gratitude for the services and contributions of all our past and present Directors.
I would also like to take this opportunity to thank all our staff members for their dedication and hard work, as well as the continued support of our stakeholders and customers. With a cohesive team of management and your unwavering support, I am certain we will be able to steer the Company and the Group towards growth and profitability in the coming years.
Michael Sumarijanto Soegijono
12 April 2012