2012 was a challenging year for the Group. The on-going global economic uncertainties, though cautiously positive, continue to put pressure on the global coal demands and selling prices. Consequently, coupled with the unusual weather conditions in Indonesia, the demand for charter activities during the financial year ended 31 December 2012 (“FY2012”) were adversely affected.
For FY2012, the Group reported a decline in revenue by S$4.1 million to S$21.4 million and recorded a net loss attributable to the equity holders of the Company of approximately S$10.7 million. Net loss would have been substantially reduced to S$3.2 million without taking into consideration the loss from discontinued operation in Eco Building Products, Inc. (“EcoB”) and one-off expenses such as impairment loss on investment in EcoB, and legal and professional fees. Despite the challenging operating environment, we were able to improve the operational efficiency. During the financial year, expenditure on fuel consumption decreased by S$1.8 million to S$6.6 million, due to better control over fuel distribution and consumption. To remain competitive and to provide quality service to our customers, the Group has engaged more qualified personnel to oversee the repair and maintenance of vessels as well as to perform more stringent quality controls on repair vendors.
Net cash used in operations increased to S$7.9 million during the financial year, mainly due to capital expenditure and prepayments for new vessels, as part of the Group’s fleet renewal process. Cash and cash equivalents remain healthy at S$72.4 million as at 31 December 2012.
In respect of the investment projects undertaken by the Group in FY2011, we acknowledge with a heavy heart the failed venture in the investment in EcoB, which saw further losses in operations of S$2.4 million and impairment loss of S$3.9 million in FY2012. Currently, the Company is pursuing its claims via its appointed U.S. counsel an reserves all its rights against EcoB, its directors and officers. As for the property development investment in Manhattan Resources (Ningbo) Property Limited (“MRN”), the project is still at preliminary planning stage, pending the settlement of the equity transfer and claims by the Chinese partners.
To better manage risks and to enhance the risk management systems, the Group established a Risk Management Committee (“RMC”) on 13 August 2012, whose responsibility is to assist the Board of directors to provide an oversight of risk management of the Group. More importantly, consistent with the risk management objectives, management have considered both the internal and external factors, evaluated the current and upcoming events, and redefined our corporate strategy so that we have a clearer, more focused strategic direction going forward.
While global economic conditions are expected to remain uncertain in 2013, the operating performance of the Group remains challenging and the Group shall continue to focus on optimising operational efficiency and cost effectiveness as well as to re-evaluate the feasibility of existing investment projects. At the forthcoming Annual General Meeting, three of our directors in the current Board, namely Messrs Michael Sumarijanto Soegijono, Lee Kwong Foo, Edward and Chang Szie Hou, will retire in compliance with provisions of the Singapore Companies Act and the Company’s Articles of Association and have each indicated that they do not wish to seek re-election. Their stewardship, guidance and wisdom will be sorely missed with their exit.
In closing, on behalf of our directors, we wish to extend our appreciation to our fellow directors, business partners, our employees for their contribution in the past years. Last but not the least, we would like to express the Group’s gratitude to our shareholders for their continued support.
Michael Sumarijanto Soegijono
5 April 2013