This printed article is located at http://qianhu.listedcompany.com/news.html
3.(e) To provide an analysis of expenses based on their nature within the group for
Included in general and administration expenses is personnel expenses amounted to $5.2 million (30/9/2001 : $4.3 million).
Note to 3(c)(i)
Earnings per ordinary share on existing issued share capital is computed based on the weighted average number of shares in issue during the period of 97,176,121 (30/9/2001 : 91,072,107).
5.(b) Amount of any pre-acquisition profits
5.(c) Amount of profits on any sale of investments and/or properties
Item 5c Table
6. Segmental Results
(ii) GEOGRAPHICAL SEGMENTS (The Group)
7.(a) Review of the performance of the company and its principal subsidiaries
Turnover
For the 9 months ended 30 September 2002, our ornamental fish activities and distribution of accessories continued to be our core activities, which together accounted for 89% of our total turnover. Geographically, our Singapore market continued to be our main market accounting for 55% of our total turnover for the 9 months ended 30 September 2002.
Our turnover increased by $15.6 million or 52.7% from $29.7 million for the 9 months ended 30 September 2001 to $45.3 million for the 9 months ended 30 September 2002. All activities registered growth in turnover. Turnover for ornamental fish, accessories, and plastics and other business increased by $4.8 million or 35.1%, $10.4 million or 89.3% and $0.5 million or 11.1%, respectively for the 9 months ended 30 September 2002 as compared to its corresponding period in FY 2001. Comparing to the 3rd quarter of FY 2001, turnover for ornamental fish, accessories, and plastics and other business increased by $2.1 million or 50.1%, $5.5 million or 141.2% and $44,000 or 2.7%, respectively in the 3rd quarter of FY 2002.
The turnover of ornamental fish recorded in the 3rd quarter of FY 2002 was $6.3 million. The continuous increase in the turnover of ornamental fish is mainly due to sales of ornamental fish to the growing numbers of local fish retail outlets and to visitors patronizing our in-house retail outlet. We also managed to increase our export of ornamental fish from Singapore and China to more countries around the world. Our subsidiary in Thailand (dealing with fish) and our newly set-up fish division in Malaysia, both commenced their operations in January 2002, have contributed positively to the turnover of ornamental fish in FY 2002.
With effect from FY 2002, the Taiwanese government has allowed the import of licensed Dragon Fish. Since January 2002, we have started export Dragon Fish to Taiwan to take advantage of the change in regulation. The sales of Dragon Fish to Taiwan accounted for approximately 24% of the increase in sales of ornamental fish for the 9 months of FY 2002.
Following the healthy growth in the 1st half of FY 2002, our accessories' turnover achieved a turnover of $9.4 million during the 3rd quarter of FY 2002. Our Malaysia & Thailand subsidiaries' sales, which have surged by almost two-fold as compared to the corresponding period in FY 2001, continued to contribute significantly to the increase in turnover of accessories as a result of market share gained from these countries in FY 2002.
In the domestic market, we continue to expand and penetrate our distribution network to more local retailers and supermarkets, which has also resulted in the increase in sales of our accessories products.
Our turnover for plastic and others experienced slower growth due to local market competitiveness. We managed to generate more through focusing on selling more high-value items and expanding our distribution channel to outside Singapore.
On a geographical basis, turnover from Singapore grew 43.3% in FY 2002 mainly as a result of improved sales of fish & aquarium accessories to local retailers and sales generated from our in-house retail outlets. Turnover from overseas grew by 66.2% for the first 9 months of FY2002 compared to the corresponding period in FY2001. Our constant effort in expanding our distribution network into overseas' untapped markets contributed to the increased in overseas turnover.
Operating profit before taxation
Our operating profit increased by $3.4 million or 126.2% to $6.1 million for the 9 months ended 30 September 2002 as compared to $2.7 million for the 9 months ended 30 September 2001. Profit after taxation increased by 129.8% from $2.1 million for the 9 months ended 30 September 2001 to approximately $4.8 million for the 9 months ended 30 September 2002.
During the 3rd quarter of FY 2002, our operating profit from ornamental fish registered flat growth notwithstanding the increase in turnover due to a slight dip in the gross profit margin yielded in the quarter. Our operating profit from ornamental fish for the 9 months ended 30 September 2002 was $0.6 million or 37.5% higher as compared to its corresponding period in FY 2001 as a result of improved sales volume this year.
Our accessories business is the main profit contributor during the 3rd quarter of FY 2002. Throughout the entire 9 months in FY 2002, with a higher sales volume, from both our local and overseas operations, and better gross profit margin achieved, we managed to grow our operating profit from the accessories business significantly as compared to the corresponding period in FY 2001. In addition, our Thailand subsidiary, which incurred set-up and restructuring costs in FY 2001, managed to be operationally profitable in FY 2002, has contributed to the improved in profitability.
Despite the increase in turnover, our plastics and other business recorded a dip in profitability. This was as a result of lower gross profit margin, higher operating costs experienced, coupled with losses incurred by one of our subsidiaries in PRC.
Unallocated corporate expenses relate to staff costs and administrative expenses incurred in relation to the overseeing of the Group's operations both locally and overseas. The increase in the first 9 months of FY 2002 was in line with additional headcount and corporate expenses.
7.(b) Where a forecast, or a prospect statement, has been previously disclosed to shareholders,
7.(c) A statement by the Directors of the Company whether any item or event of a material or
In the opinion of the Directors, no item, transaction or event of a material or unusual nature has arisen in the interval between the end of the financial period under review to the date of this report which will substantially affect the results of the Group and of the Company for the 9 months ended 30 September 2002.
8. A commentary at the date of this announcement of the competitive conditions of the
Since the announcement on our last quarter's results, we have increased our equity stake in Guangzhou Wan Jiang to 60% in October 2002. The other factors which we have previously announced in our last quarter's results will continue to apply in the next quarter. We will announce any new developments that may have an impact on our Group's performance, as and when they arise.
Looking at the results in last three quarters, we are confident that the Group will be able to increase its turnover and profit for the entire FY 2002.
Risk factors
Normal business risk
Like in all other businesses, setting up new entities suffers losses initially due to depreciation, low turnover, and competition. However, we do not foresee any new business entity being set up in FY 2002 and we are going to concentrate in expanding our overseas market shares and distribution network in our overseas subsidiaries.
Although collectibilty and high inventory is part of the normal business risk, our Group's has adopted prudent policies to make 10% general provision for all trade debts overdue for more than 120 days and a full provision for all non-moving stocks for duration of more than 6 months.
Suppliers and customers risk
None of our suppliers or customers contributes more than 5% of our total turnover.
Outbreak of diseases and infection
Ornamental fish, like other livestock, is susceptible to disease and infection. However, different breeds of fish are vulnerable to different types of diseases. While as it is possible that a rare or virulent strain of bacteria or virus may inflect a particular breed of fish in the farm, fatal infection across breeds is uncommon. With good health management, we have to-date not encountered any outbreak of diseases or inflection in our farm.
Reliant on Asian Market for the sales of Dragon Fish
The sales for Dragon Fish contributed around 8% and 6% of our total Group's turnover and PBT respectively during the first 9 months of FY 2002. With the import deregulation moves in Taiwan, we export our Dragon Fish mainly to Japan and Taiwan, as well as distributing them to local retailers. Since the second half of FY 2002, we also export more Dragon Fish to China, Malaysia and Thailand and distribute them through our own subsidiaries.
Currently, we export over 500 species and varieties of ornamental fish directly to more than 60 countries and different countries require different types and varieties of fish.
Reliant on the sales of Flower Horn Fish ("Luo Han")
Based on the first 9 months of FY 2002, Luo Han sales contributed approximately 6% of our fish sales and less than 3% of our Group total turnover. We are conscious about the danger of relying on one product, one customer, or one supplier. We hedges such risk by having our own domestic distribution networks, to have more products offering and to export to as many countries as possible.
Fluctuation in foreign exchange currencies against the S$
During the first 9 months of FY 2002, approximately 90% of our sales are dominated in S$. Around 50% of our purchases are dominated in S$, the rest are in Euro, US$, and Yen. Although we do not entered into any hedging contracts, we do have an unstructured internal policy to hedge the fluctuation in certain currency when the management deems necessary.
9. Dividend
(d) Date payable
(e) Books closure date
(f) Any other comments relating to Paragraph 9
10.(a) Balance sheet
10.(b) Cash flow statement
10.(c) Statement of changes in equity
10.(d) Explanatory notes that are material to an understanding of the information provided in
Accounting policies
Statement of Accounting Standards ("SAS") 39, Agriculture
SAS 39 which took effect for financial years beginning on or after 1 October 2001, establishes accounting and reporting standards for recognizing, measuring and disclosing information relating to agricultural activity, including biological assets. It requires biological asset, which meet recognition criteria, to be measured on initial recognition and at each balance sheet date at its fair value less estimated point-of-sales costs. Gain and loss arising from these measurements should be included in the net profit or loss for the period in which it arises. However, where fair value of the biological asset cannot be measured reliably, the biological asset should be stated at cost less accumulated depreciation and any accumulated impairment losses.
Included in fixed assets of the Group and of the Company as at 30 September 2002 were brooder stocks, which are parent stocks of Dragon Fish, held for the use in the breeding of Dragon Fish, amounting to $1.38 million. Due to the uniqueness of each Dragon Fish, we believe that its fair value cannot be determined reliably. In compliance with SAS 39, these brooder stocks were carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis so as to write off the cost of these brooder stocks over their estimated lives of 50 years.
SAS 12, Income Taxes
SAS 12, which took effect for financial years beginning on or after 1 April 2001, requires deferred tax to be calculated using the balance sheet liability method. Deferred tax assets should be recognized when it is probable that sufficient taxable profit will be available against which the deferred tax assets can be utilized.
With effect from 1 January 2002, the Group changed its accounting policy with respect to the treatment of deferred taxation in order to conform to the new requirements of SAS 12. The change in accounting policy has no material impact to the retained earnings of the Group and of the Company as at 31 December 2001.
11. Details of any changes in the company's issued share capital
Use of Placement Proceeds
The net proceeds from the Placement exercise announced on 9 May 2002, after deducting expenses, was approximately $4.2 million. As at 30 September 2002, the amount has been partially utilized by our Group's local and overseas operations as working capital set out as follows :
12. The group's borrowings and debt securities as at the end of the financial period reported
(c) Any other comments relating to Paragraph 12
The Group's borrowings, previously secured by a second legal mortgage on certain properties held by certain shareholders of the Company, has been discharged during the 3rd quarter of FY 2002.
13. A statement that the same accounting polices and methods of computation are followed
Other than the adoption of new SAS as mentioned in paragraph 10(d) above, there were no changes in accounting policies and methods of computation adopted in the financial statements for the current reporting period as compared to the most recent audited annual financial statements as at 31 December 2001.
14. Contingent Liabilities
As at 30 September 2002, the Group and the Company have no contingent liabilities.
BY ORDER OF THE BOARD
Kenny Yap Kim Lee
Executive Chairman and Managing Director
14/10/2002
News
Third Quarter Financial Statement Announcement
BackOct 14, 2002
The Board of Directors of Qian Hu Corporation Limited is pleased to announce the results of the Group and of the Company for the 9 months ended 30 September 2002.
These figures have not been audited.
| - | - |
Group |
Company | ||||
| - | - |
S$'000 |
% |
S$'000 |
% | ||
| - | - |  |
|
|
|
|
|
| - | - |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
| 1.(a) | Turnover |
45,281 |
29,655 |
52.7 |
29,618 |
24,052 |
23.1 |
|
|
|
|
|
|
|
|
| 1.(b) | Cost of sales or classification as followed in the most recent audited annual financial statements |
29,007 |
19,333 |
50.0 |
18,469 |
16,070 |
14.9 |
|
|
|
|
|
|
|
|
| 1.(c) | Gross profit/loss |
16,274 |
10,322 |
57.7 |
11,149 |
7,982 |
39.7 |
|
|
|
|
|
|
|
|
| 1.(d) | Investment income |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 1.(e) | Other income including interest income |
3 |
7 |
(57.1) |
1 |
3 |
(66.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2.(a) | Operating profit before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items |
7,182 |
3,468 |
107.1 |
5,058 |
3,116 |
62.3 |
|
|
|
|
|
|
|
|
| 2.(b)(i) | Interest on borrowings |
(73) |
(50) |
46.0 |
(59) |
(43) |
37.2 |
|
|
|
|
|
|
|
|
| 2.(b)(ii) | Depreciation and amortisation |
(1,042) |
(870) |
19.8 |
(618) |
(602) |
2.7 |
|
|
|
|
|
|
|
|
| 2.(b)(iii) | Foreign exchange gain/(loss) |
(50) |
124 |
(140.3) |
15 |
57 |
(73.7) |
|
|
|
|
|
|
|
|
| 2.(c) | Exceptional items (provide separate disclosure of items) |
0 |
0 |
0 |
0 |
0 |
0 |
| - | - | |
|
|
|
|
|
| - | - |
S$'000 |
% |
S$'000 |
% | ||
| - | - | |
|
|
|
|
|
| - | - |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
| 2.(d) | Operating profit before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items |
6,017 |
2,672 |
125.2 |
4,396 |
2,528 |
73.9 |
|
|
|
|
|
|
|
|
| 2.(e) | Income derived from associated companies (With separate disclosure of any items included therein which are exceptional because of size & incidence) |
90 |
28 |
221.4 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 2.(f) | Operating profit before income tax |
6,107 |
2,700 |
126.2 |
4,396 |
2,528 |
73.9 |
|
|
|
|
|
|
|
|
| 2.(g) | Less income tax (Indicate basis of computation) |
(1,334) |
(675) |
97.6 |
(950) |
(570) |
66.7 |
|
|
|
|
|
|
|
|
| 2.(g)(i) | Operating profit after tax before deducting minority interests |
4,773 |
2,025 |
135.7 |
3,446 |
1,958 |
76.0 |
|
|
|
|
|
|
|
|
| 2.(g)(ii) | Less minority interests |
30 |
65 |
(53.9) |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 2.(h) | Operating profit after tax attributable to members of the company |
4,803 |
2,090 |
129.8 |
3,446 |
1,958 |
76.0 |
|
|
|
|
|
|
|
|
| 2.(i)(i) | Extraordinary items (provide separate disclosure of items) |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 2.(i)(ii) | Less minority interests |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 2.(i)(iii) | Extraordinary items attributable to members of the company |
0 |
0 |
0 |
0 |
0 |
0 |
| - | - |
Group |
Company | ||||
| - | - |
S$'000 |
% |
S$'000 |
% | ||
| - | - | |
|
|
|
|
|
| - | - |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
| 2.(i)(iv) | Transfer to/from Exchange Reserve |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 2.(i)(v) | Transfer to Capital Reserve |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 2.(i)(vi) | Transfer to Reserve Fund |
0 |
0 |
0 |
0 |
0 |
0 |
|
|
|
|
|
|
|
|
| 2.(j) | Operating profit after tax and extraordinary items attributable to members of the company |
4,803 |
2,090 |
129.8 |
3,446 |
1,958 |
76.0 |
|
Group Figures | |||
| - | - |
Latest period |
Previous corresponding period |
| 3.(a) | Operating profit [2(g)(i) above] as a percentage of turnover [1(a) above] |
10.54% |
6.83% |
|
|
|
|
| 3.(b) | Operating profit [2(h) above] as a percentage of issued capital and reserves at end of the period |
18.50% |
13.30% |
|
|
|
|
| 3.(c) | Earnings per ordinary share for the period based on 2(h) above after deducting any provision for preference dividends:- | |
|
|
(i) Based on weighted average number of ordinary shares in issue |
4.94 cents |
2.29 cents |
|
|
|
|
|
(ii) On a fully diluted basis (To disclose the basis used in arriving at the weighted average number of shares for the purposes of (c)(i) above and to provide details of any adjustments made for the purpose of (c)(ii) above) |
4,90 cents |
2.28 cents |
|
|
|
|
| 3.(d) | Net tangible asset backing per ordinary share based on existing issued share capital as at the end of the period reported on |
25.14 cents |
18.52 cents |
3.(e) To provide an analysis of expenses based on their nature within the group for
the current and previous corresponding period
|
30/9/2002 $'000 |
30/9/2001 $'000 |
Increased $'000 |
% |
| Selling and distribution |
1,141 |
897 |
244 |
27.2 |
| General and administration |
9,044 |
6,714 |
2,330 |
34.7 |
| Financial |
73 |
50 |
23 |
46.0 |
|
10,258 |
7,661 |
2,597 |
|
Note to 3(c)(i)
Earnings per ordinary share on existing issued share capital is computed based on the weighted average number of shares in issue during the period of 97,176,121 (30/9/2001 : 91,072,107).
Note 3(c)(ii)
Earnings per ordinary share on a fully diluted basis is computed based on the weighted average number of shares during the period adjusted to assume conversion of all potential dilutive ordinary shares of 98,096,210 (30/9/2001 : 91,671,359).
| - | - |
Group |
Company | ||||
| Item 4 is not applicable to interim results |
S$'000 |
% |
S$'000 |
% | |||
| - | - | |
|
|
|
|
|
| - | - |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
30/9/2002 |
30/9/2001 |
Increase/ (Decrease) |
| 4.(a) | Sales reported for first half year | ||||||
|
|
|
|
|
|
|
|
| 4.(b) | Operating profit [2(g)(i) above] reported for first half year | ||||||
|
|
|
|
|
|
|
|
| 4.(c) | Sales reported for second half year | ||||||
|
|
|
|
|
|
|
|
| 4.(d) | Operating profit [2(g)(i) above] reported for second half year | ||||||
5.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years
- There was no adjustment for under or overprovision of tax in respect of prior years.
5.(b) Amount of any pre-acquisition profits
- There was no pre-acquisition profits included in the results reported.
5.(c) Amount of profits on any sale of investments and/or properties
Item 5c Table
| Sale of investments/properties |
$Profit/(Loss) |
| Not applicable | |
- Not Applicable
6. Segmental Results
(i) BUSINESS SEGMENTS (The Group)
| 30/9/2002 |
Fish $'000 |
Accessories $'000 |
Others $'000 |
Eliminations $'000 |
Total $'000 |
| TURNOVER | |
|
|
|
|
| External sales |
18,329 |
21,984 |
4,968 |
- |
45,281 |
| Inter-segment sales |
1,125 |
7,327 |
947 |
(9,399) |
- |
| Total sales |
19,454 |
29,311 |
5,915 |
(9,399) |
45,281 |
|
|
|
|
|
|
| RESULTS | |
|
|
|
|
| Segment results |
2,029 |
4,795 |
190 |
(60) |
6,954 |
| Unallocated expenses | |
|
|
|
(864) |
|
|
|
|
|
6,090 |
| Financial expenses - net | |
|
|
|
(73) |
| Share of profit of associated companies | |
|
|
|
90 |
| Taxation | |
|
|
|
(1,334) |
| Minority interests | |
|
|
|
30 |
| Net profit for the period | |
|
|
|
4,803 |
|
|
|
|
|
|
| ASSETS & LIABILITIES | |
|
|
|
|
| Assets |
13,690 |
17,164 |
5,375 |
- |
36,229 |
| Investment in associated companies | |
|
|
|
433 |
| Unallocated assets | |
|
|
|
2,347 |
| Total assets | |
|
|
|
39,009 |
|
|
|
|
|
|
| Liabilities |
3,861 |
5,732 |
1,331 |
- |
10,924 |
| Unallocated liabilities | |
|
|
|
2,096 |
| Total liabilities | |
|
|
|
13,020 |
|
|
|
|
|
|
| OTHER INFORMATION | |
|
|
|
|
| Capital expenditure |
910 |
624 |
182 |
- |
1,716 |
| Depreciation and amortisation |
475 |
333 |
234 |
- |
1,042 |
| Other non-cash expenses (income) |
200 |
(10) |
(30) |
- |
160 |
| 30/9/2001 |
Fish $'000 |
Accessories $'000 |
Others $'000 |
Eliminations $'000 |
Total $'000 |
| TURNOVER | |
|
|
|
|
| External sales |
13,568 |
11,615 |
4,472 |
- |
29,655 |
| Inter-segment sales |
360 |
2,468 |
114 |
(2,942) |
- |
| Total sales |
13,928 |
14,083 |
4,586 |
(2,942) |
29,655 |
|
|
|
|
|
|
| RESULTS | |
|
|
|
|
| Segment results |
1,468 |
1,593 |
236 |
(18) |
3,279 |
| Unallocated expenses | |
|
|
|
(557) |
|
|
|
|
|
2,722 |
| Financial expenses - net | |
|
|
|
(50) |
| Share of profit of associated companies | |
|
|
|
28 |
| Taxation | |
|
|
|
(675) |
| Minority interest | |
|
|
|
65 |
| Net profit for the period | |
|
|
|
2,090 |
|
|
|
|
|
|
| ASSETS & LIABILITIES | |
|
|
|
|
| Assets |
10,509 |
8,871 |
5,105 |
- |
24,485 |
| Investment in associated companies | |
|
|
|
350 |
| Unallocated assets | |
|
|
|
292 |
| Total assets | |
|
|
|
25,127 |
|
|
|
|
|
|
| Liabilities |
2,942 |
2,931 |
1,806 |
- |
7,679 |
| Unallocated liabilities | |
|
|
|
1,735 |
| Total liabilities | |
|
|
|
9,414 |
|
|
|
|
|
|
| OTHER INFORMATION | |
|
|
|
|
| Capital expenditure |
285 |
193 |
986 |
- |
1,464 |
| Depreciation and amortisation |
358 |
304 |
208 |
- |
870 |
| Other non-cash expenses (income) |
34 |
(316) |
(68) |
- |
(350) |
(ii) GEOGRAPHICAL SEGMENTS (The Group)
|
Turnover |
Turnover |
Assets |
Assets |
Capital expenditure |
Capital expenditure |
|
30/9/2002 $'000 |
30/9/2001 $'000 |
30/9/2002 $'000 |
30/9/2001 $'000 |
30/9/2002 $'000 |
30/9/2001 $'000 |
| Singapore |
25,105 |
17,515 |
28,944 |
19,287 |
1,029 |
1,123 |
| Overseas |
20,176 |
12,140 |
10,065 |
5,840 |
687 |
341 |
| Total |
45,281 |
29,655 |
39,009 |
25,127 |
1,716 |
1,464 |
7.(a) Review of the performance of the company and its principal subsidiaries
Turnover
| 3rd Quarter 2002 vs 3rd Quarter 2001 |
3rd Qtr 2002 $'000 |
3rd Qtr 2001 $'000 |
Increased $'000 |
% |
| Fish |
6,339 |
4,224 |
2,115 |
50.1 |
| Accessories |
9,424 |
3,908 |
5,516 |
141.2 |
| Plastic & others |
1,701 |
1,657 |
44 |
2.7 |
|
17,464 |
9,789 |
7,675 |
|
| 9 months 2002 vs 9 months 2001 |
9 mths 2002 $'000 |
9 mths 2001 $'000 |
Increased $'000 |
% |
| Fish |
18,329 |
13,568 |
4,761 |
35.1 |
| Accessories |
21,984 |
11,615 |
10,369 |
89.3 |
| Plastic & others |
4,968 |
4,472 |
496 |
11.1 |
|
45,281 |
29,655 |
15,626 |
|
Our turnover increased by $15.6 million or 52.7% from $29.7 million for the 9 months ended 30 September 2001 to $45.3 million for the 9 months ended 30 September 2002. All activities registered growth in turnover. Turnover for ornamental fish, accessories, and plastics and other business increased by $4.8 million or 35.1%, $10.4 million or 89.3% and $0.5 million or 11.1%, respectively for the 9 months ended 30 September 2002 as compared to its corresponding period in FY 2001. Comparing to the 3rd quarter of FY 2001, turnover for ornamental fish, accessories, and plastics and other business increased by $2.1 million or 50.1%, $5.5 million or 141.2% and $44,000 or 2.7%, respectively in the 3rd quarter of FY 2002.
The turnover of ornamental fish recorded in the 3rd quarter of FY 2002 was $6.3 million. The continuous increase in the turnover of ornamental fish is mainly due to sales of ornamental fish to the growing numbers of local fish retail outlets and to visitors patronizing our in-house retail outlet. We also managed to increase our export of ornamental fish from Singapore and China to more countries around the world. Our subsidiary in Thailand (dealing with fish) and our newly set-up fish division in Malaysia, both commenced their operations in January 2002, have contributed positively to the turnover of ornamental fish in FY 2002.
With effect from FY 2002, the Taiwanese government has allowed the import of licensed Dragon Fish. Since January 2002, we have started export Dragon Fish to Taiwan to take advantage of the change in regulation. The sales of Dragon Fish to Taiwan accounted for approximately 24% of the increase in sales of ornamental fish for the 9 months of FY 2002.
Following the healthy growth in the 1st half of FY 2002, our accessories' turnover achieved a turnover of $9.4 million during the 3rd quarter of FY 2002. Our Malaysia & Thailand subsidiaries' sales, which have surged by almost two-fold as compared to the corresponding period in FY 2001, continued to contribute significantly to the increase in turnover of accessories as a result of market share gained from these countries in FY 2002.
In the domestic market, we continue to expand and penetrate our distribution network to more local retailers and supermarkets, which has also resulted in the increase in sales of our accessories products.
Our turnover for plastic and others experienced slower growth due to local market competitiveness. We managed to generate more through focusing on selling more high-value items and expanding our distribution channel to outside Singapore.
On a geographical basis, turnover from Singapore grew 43.3% in FY 2002 mainly as a result of improved sales of fish & aquarium accessories to local retailers and sales generated from our in-house retail outlets. Turnover from overseas grew by 66.2% for the first 9 months of FY2002 compared to the corresponding period in FY2001. Our constant effort in expanding our distribution network into overseas' untapped markets contributed to the increased in overseas turnover.
Operating profit before taxation
| 3rd Quarter 2002 vs 3rd Quarter 2001 |
3rd Qtr 2002 $'000 |
3rd Qtr 2001 $'000 |
Increased (Decreased) $'000 |
% |
| Fish |
380 |
378 |
2 |
0.5 |
| Accessories |
2,315 |
523 |
1,792 |
342.6 |
| Plastic & others |
27 |
52 |
(25) |
(48.1) |
| Unallocated corporate expenses |
(283) |
(520) |
237 |
(45.6) |
|
2,439 |
433 |
2,006 |
|
| 9 months 2002 vs 9 months 2001 |
9 mths 2002 $'000 |
9 mths 2001 $'000 |
Increased (Decreased) $'000 |
% |
| Fish |
2,018 |
1,468 |
550 |
37.5 |
| Accessories |
4,867 |
1,593 |
3,274 |
205.5 |
| Plastic & others |
185 |
264 |
(79) |
(29.9) |
| Unallocated corporate expenses |
(963) |
(625) |
(338) |
54.1 |
|
6,107 |
2,700 |
3,407 |
|
During the 3rd quarter of FY 2002, our operating profit from ornamental fish registered flat growth notwithstanding the increase in turnover due to a slight dip in the gross profit margin yielded in the quarter. Our operating profit from ornamental fish for the 9 months ended 30 September 2002 was $0.6 million or 37.5% higher as compared to its corresponding period in FY 2001 as a result of improved sales volume this year.
Our accessories business is the main profit contributor during the 3rd quarter of FY 2002. Throughout the entire 9 months in FY 2002, with a higher sales volume, from both our local and overseas operations, and better gross profit margin achieved, we managed to grow our operating profit from the accessories business significantly as compared to the corresponding period in FY 2001. In addition, our Thailand subsidiary, which incurred set-up and restructuring costs in FY 2001, managed to be operationally profitable in FY 2002, has contributed to the improved in profitability.
Despite the increase in turnover, our plastics and other business recorded a dip in profitability. This was as a result of lower gross profit margin, higher operating costs experienced, coupled with losses incurred by one of our subsidiaries in PRC.
Unallocated corporate expenses relate to staff costs and administrative expenses incurred in relation to the overseeing of the Group's operations both locally and overseas. The increase in the first 9 months of FY 2002 was in line with additional headcount and corporate expenses.
7.(b) Where a forecast, or a prospect statement, has been previously disclosed to shareholders,
- the issuer must explain any variance between the forecast or prospect statement and the
actual results
- Not Applicable
7.(c) A statement by the Directors of the Company whether any item or event of a material or
- unusual nature, which would have affected materially the results of operations of the Group
and Company, has occurred between the date to which the report refers and the date on
which the report is issued. If none, to give a negative statement.
In the opinion of the Directors, no item, transaction or event of a material or unusual nature has arisen in the interval between the end of the financial period under review to the date of this report which will substantially affect the results of the Group and of the Company for the 9 months ended 30 September 2002.
8. A commentary at the date of this announcement of the competitive conditions of the
- industry in which the group operates and any known factors or events that may affect
the group in the next reporting period
Since the announcement on our last quarter's results, we have increased our equity stake in Guangzhou Wan Jiang to 60% in October 2002. The other factors which we have previously announced in our last quarter's results will continue to apply in the next quarter. We will announce any new developments that may have an impact on our Group's performance, as and when they arise.
Looking at the results in last three quarters, we are confident that the Group will be able to increase its turnover and profit for the entire FY 2002.
Risk factors
Normal business risk
Like in all other businesses, setting up new entities suffers losses initially due to depreciation, low turnover, and competition. However, we do not foresee any new business entity being set up in FY 2002 and we are going to concentrate in expanding our overseas market shares and distribution network in our overseas subsidiaries.
Although collectibilty and high inventory is part of the normal business risk, our Group's has adopted prudent policies to make 10% general provision for all trade debts overdue for more than 120 days and a full provision for all non-moving stocks for duration of more than 6 months.
Suppliers and customers risk
None of our suppliers or customers contributes more than 5% of our total turnover.
Outbreak of diseases and infection
Ornamental fish, like other livestock, is susceptible to disease and infection. However, different breeds of fish are vulnerable to different types of diseases. While as it is possible that a rare or virulent strain of bacteria or virus may inflect a particular breed of fish in the farm, fatal infection across breeds is uncommon. With good health management, we have to-date not encountered any outbreak of diseases or inflection in our farm.
Reliant on Asian Market for the sales of Dragon Fish
The sales for Dragon Fish contributed around 8% and 6% of our total Group's turnover and PBT respectively during the first 9 months of FY 2002. With the import deregulation moves in Taiwan, we export our Dragon Fish mainly to Japan and Taiwan, as well as distributing them to local retailers. Since the second half of FY 2002, we also export more Dragon Fish to China, Malaysia and Thailand and distribute them through our own subsidiaries.
Currently, we export over 500 species and varieties of ornamental fish directly to more than 60 countries and different countries require different types and varieties of fish.
Reliant on the sales of Flower Horn Fish ("Luo Han")
Based on the first 9 months of FY 2002, Luo Han sales contributed approximately 6% of our fish sales and less than 3% of our Group total turnover. We are conscious about the danger of relying on one product, one customer, or one supplier. We hedges such risk by having our own domestic distribution networks, to have more products offering and to export to as many countries as possible.
Fluctuation in foreign exchange currencies against the S$
During the first 9 months of FY 2002, approximately 90% of our sales are dominated in S$. Around 50% of our purchases are dominated in S$, the rest are in Euro, US$, and Yen. Although we do not entered into any hedging contracts, we do have an unstructured internal policy to hedge the fluctuation in certain currency when the management deems necessary.
9. Dividend
| (a) Any dividend declared for the present financial period? - |
None | - | |
|
|
|
|
| (b) Any dividend declared for the previous corresponding period? | None | | |
| (c) Total Annual Dividend | |||
| - | |
|
|
| - |
Latest Year () |
Previous Year () |
|
|
|
|
|
| Ordinary |
0 |
0 |
|
| Preference |
0 |
0 |
|
| Total: |
0 |
0 |
|
|
| ||
(d) Date payable
- Not Applicable
(e) Books closure date
- Not Applicable
(f) Any other comments relating to Paragraph 9
- Not Applicable
10.(a) Balance sheet
|
Group |
Group |
Company |
Company |
|
30/9/2002 $ |
30/6/2002 $ |
30/9/2002 $ |
30/6/2002 $ |
| Share capital and reserves | |
|
|
|
| Share capital |
10,218,570 |
10,215,770 |
10,218,570 |
10,215,770 |
| Reserves |
15,739,255 |
13,816,774 |
13,055,814 |
11,837,038 |
|
25,957,825 |
24,032,544 |
23,274,384 |
22,052,808 |
| Minority interest |
31,026 |
39,565 |
- |
- |
|
25,988,851 |
24,072,109 |
23,274,384 |
22,052,808 |
|
|
|
|
|
| Fixed assets |
8,444,602 |
8,403,073 |
5,597,898 |
5,520,519 |
| Subsidiaries |
- |
- |
2,450,844 |
2,450,844 |
| Associates |
433,295 |
367,767 |
356,653 |
356,653 |
| Quoted equity investments, at cost |
3,828 |
3,828 |
- |
- |
| Trademarks/customer acquisition cost, product listing fees |
84,389 |
23,388 |
80,199 |
18,568 |
| Land use rights |
216,780 |
214,884 |
- |
- |
|
|
|
|
|
| Current assets | |
|
|
|
| Stocks |
8,873,178 |
7,840,564 |
4,451,166 |
4,267,262 |
| Trade debtors |
11,028,343 |
10,464,029 |
7,282,987 |
6,902,056 |
| Other debtors, deposits and prepayments |
698,761 |
866,848 |
292,886 |
408,579 |
| Due from | |
|
|
|
| - subsidiaries (trade) |
- |
- |
4,267,437 |
3,511,245 |
| - subsidiaries (non-trade) |
- |
- |
1,131,109 |
1,089,353 |
| - associates (trade) |
1,455,411 |
915,734 |
1,455,411 |
915,734 |
| - associates (non-trade) |
709,282 |
702,322 |
709,282 |
702,322 |
| Fixed deposits |
1,097,839 |
597,839 |
1,021,393 |
521,393 |
| Cash and bank balances |
5,962,984 |
5,653,682 |
4,760,130 |
4,639,626 |
|
29,825,798 |
27,041,018 |
25,371,801 |
22,957,570 |
|
|
|
|
|
| Current liabilities | |
|
|
|
| Trade creditors |
4,945,062 |
4,486,480 |
3,795,691 |
3,132,835 |
| Bills payable to bank |
1,545,094 |
1,391,452 |
1,545,094 |
1,391,452 |
| Other creditors and accruals |
3,221,937 |
2,983,195 |
2,614,928 |
2,253,537 |
| Due to | |
|
|
|
| - subsidiaries (trade) |
- |
- |
42,543 |
77,118 |
| - directors (non-trade) |
- |
1,653 |
- |
- |
| Hire purchase creditors, current portion |
331,181 |
325,429 |
150,985 |
146,559 |
| Term loan, current portion |
200,000 |
200,000 |
200,000 |
200,000 |
| Provision for taxation |
1,493,602 |
1,322,136 |
1,153,633 |
973,123 |
|
11,736,876 |
10,710,345 |
9,502,874 |
8,174,624 |
|
|
|
|
|
| Net current assets |
18,088,922 |
16,330,673 |
15,868,927 |
14,782,946 |
|
|
|
|
|
| Non-current liabilities | |
|
|
|
| Hire purchase creditors, non-current portion |
(754,643) |
(692,647) |
(603,055) |
(549,105) |
| Term loan, non-current portion |
(253,082) |
(303,617) |
(253,082) |
(303,617) |
| Deferred taxation |
(275,240) |
(275,240) |
(224,000) |
(224,000) |
|
25,988,851 |
24,072,109 |
23,274,384 |
22,052,808 |
10.(b) Cash flow statement
| THE GROUP |
1/1/2002 to 30/9/2002 $ |
1/1/2001 to 30/9/2001 $ |
| Cash flows from operating activities | |
|
| Profit before taxation and minority interest |
6,107,134 |
2,699,608 |
| Adjustments for: | |
|
| Depreciation of fixed assets |
944,754 |
717,028 |
| Profit on disposal of land use rights |
- |
(48,703) |
| Profit on disposal of fixed assets |
(40,333) |
(35,093) |
| Amortisation of land use rights |
5,407 |
16,546 |
| Amortisation of trademarks/customer acquisition costs, product listing fees |
92,302 |
136,276 |
| Provision for doubtful trade debts |
199,589 |
34,000 |
| Provision for stock obsolescence written back |
- |
(300,000) |
| Share of profit of associated companies |
(89,624) |
(27,677) |
| Interest expense |
75,996 |
56,854 |
| Interest income |
(3,012) |
(6,684) |
| Net effect of exchange differences |
(39,167) |
41,107 |
| Operating profit before working capital changes |
7,253,046 |
3,283,262 |
| (Increase) decrease in: | |
|
| Stocks |
(2,228,089) |
(1,033,967) |
| Trade debtors |
(2,422,420) |
(2,399,297) |
| Other debtors, deposits and prepayments |
138,587 |
205,533 |
| Due from | |
|
| - associates (trade) |
(1,039,492) |
(171,647) |
| - associates (non-trade) |
(152,145) |
(315,256) |
| Increase (decrease) in: | |
|
| Trade creditors |
1,392,513 |
191,387 |
| Bills payable to bank |
392,095 |
198,288 |
| Other creditors and accruals |
730,222 |
582,810 |
| Due to directors (non-trade) |
(2,309) |
(299,170) |
| Cash generated from operations |
4,062,008 |
241,943 |
| Income tax paid |
(829,656) |
(768,289) |
| Interest paid |
(75,996) |
(56,854) |
| Interest received |
3,012 |
6,684 |
| Net cash generated from (used in) operating activities |
3,159,368 |
(576,516) |
|
|
|
| Cash flows from investing activities | |
|
| Purchase of fixed assets |
(1,089,280) |
(1,135,463) |
| Proceeds from disposal of fixed assets |
41,000 |
201,455 |
| Advance for investment |
- |
(92,280) |
| Payment for land use rights |
- |
(31,937) |
| Payment for trademarks/customer acquisition cost, product listing fees |
(78,019) |
(51,468) |
| Net cash used in investing activities |
(1,126,299) |
(1,109,693) |
|
|
|
| Cash flows from financing activities | |
|
| Repayment of hire purchase creditors |
(243,869) |
(189,525) |
| Repayment of term loan |
(150,531) |
(144,117) |
| Payment of dividend |
(376,860) |
(312,426) |
| Proceeds from issue of new shares (net) |
4,463,888 |
2,880 |
| Net cash generated from (used in) financing activities |
3,692,628 |
(643,188) |
|
|
|
| Net increase (decrease) in cash and cash equivalents |
5,725,697 |
(2,329,397) |
| Cash and cash equivalents at beginning of period |
1,335,126 |
3,230,972 |
| Cash and cash equivalents at end of period |
7,060,823 |
901,575 |
| Cash and cash equivalents comprises : | |
|
| Fixed deposits |
1,097,839 |
95,541 |
| Cash and bank balances |
5,962,984 |
806,034 |
| Cash and cash equivalents at end of period |
7,060,823 |
901,575 |
10.(c) Statement of changes in equity
|
Share Capital $ |
Share premium $ |
Revenue reserve $ |
Translation reserve $ |
Total $ |
| Balance 1 Jan 2001 |
8,275,000 |
2,081,887 |
3,361,160 |
25,546 |
13,743,593 |
| Currency translation differences |
- |
- |
- |
87,275 |
87,275 |
| Net profit for the period |
- |
- |
601,299 |
- |
601,299 |
| Issue of new shares |
1,200 |
1,680 |
- |
- |
2,880 |
| Balance at 31 Mar 2001 |
8,276,200 |
2,083,567 |
3,962,459 |
112,821 |
14,435,047 |
| Currency translation differences |
- |
- |
- |
9,008 |
9,008 |
| Net profit for the period |
- |
- |
1,124,896 |
- |
1,124,896 |
| Payment of final dividend |
- |
- |
(312,426) |
- |
(312,426) |
| Balance at 30 June 2001 |
8,276,200 |
2,083,567 |
4,774,929 |
121,829 |
15,256,525 |
| Currency translation differences |
- |
- |
- |
(41,603) |
(41,603) |
| Net profit for the period |
- |
- |
497,302 |
- |
497,302 |
| Balance at 30 Sept 2001 |
8,276,200 |
2,083,567 |
5,272,231 |
80,226 |
15,712,224 |
| Currency translation differences |
- |
- |
- |
124,944 |
124,944 |
| Net profit for the period |
- |
- |
1,334,872 |
- |
1,334,872 |
| Balance at 31 Dec 2001 |
8,276,200 |
2,083,567 |
6,607,103 |
205,170 |
17,172,040 |
| Currency translation differences |
- |
- |
- |
(65,870) |
(65,870) |
| Net profit for the period |
- |
- |
1,043,587 |
- |
1,043,587 |
| Issue of new shares |
36,500 |
51,100 |
- |
- |
87,600 |
| Capitalisation of share premium for bonus shares |
831,270 |
(831,270) |
- |
- |
- |
| Balance at 31 Mar 2002 |
9,143,970 |
1,303,397 |
7,650,690 |
139,300 |
18,237,357 |
| Currency translation differences |
- |
- |
- |
(70,985) |
(70,985) |
| Net profit for the period |
- |
- |
1,873,464 |
- |
1,873,464 |
| Payment of final dividend |
- |
- |
(376,860) |
- |
(376,860) |
| Issue of new shares |
1,071,800 |
3,600,520 |
- |
- |
4,672,320 |
| Share issue expenses |
- |
(302,752) |
- |
- |
(302,752) |
| Balance at 30 June 2002 |
10,215,770 |
4,601,165 |
9,147,294 |
68,315 |
24,032,544 |
| Currency translation differences |
- |
- |
- |
33,004 |
33,004 |
| Net profit for the period |
- |
- |
1,885,557 |
- |
1,885,557 |
| Issue of new shares |
2,800 |
3,920 |
- |
- |
6,720 |
| Balance at 30 Sept 2002 |
10,218,570 |
4,605,085 |
11,032,851 |
101,319 |
25,957,825 |
10.(d) Explanatory notes that are material to an understanding of the information provided in
- 10.(a), (b) and (c) above
Accounting policies
Statement of Accounting Standards ("SAS") 39, Agriculture
SAS 39 which took effect for financial years beginning on or after 1 October 2001, establishes accounting and reporting standards for recognizing, measuring and disclosing information relating to agricultural activity, including biological assets. It requires biological asset, which meet recognition criteria, to be measured on initial recognition and at each balance sheet date at its fair value less estimated point-of-sales costs. Gain and loss arising from these measurements should be included in the net profit or loss for the period in which it arises. However, where fair value of the biological asset cannot be measured reliably, the biological asset should be stated at cost less accumulated depreciation and any accumulated impairment losses.
Included in fixed assets of the Group and of the Company as at 30 September 2002 were brooder stocks, which are parent stocks of Dragon Fish, held for the use in the breeding of Dragon Fish, amounting to $1.38 million. Due to the uniqueness of each Dragon Fish, we believe that its fair value cannot be determined reliably. In compliance with SAS 39, these brooder stocks were carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis so as to write off the cost of these brooder stocks over their estimated lives of 50 years.
SAS 12, Income Taxes
SAS 12, which took effect for financial years beginning on or after 1 April 2001, requires deferred tax to be calculated using the balance sheet liability method. Deferred tax assets should be recognized when it is probable that sufficient taxable profit will be available against which the deferred tax assets can be utilized.
With effect from 1 January 2002, the Group changed its accounting policy with respect to the treatment of deferred taxation in order to conform to the new requirements of SAS 12. The change in accounting policy has no material impact to the retained earnings of the Group and of the Company as at 31 December 2001.
11. Details of any changes in the company's issued share capital
- During the 3rd quarter of FY 2002, 28,000 share options were exercised at $0.24 per share pursuant to the terms of the Qian Hu Pre-IPO Share Option Scheme ("Pre-IPO Scheme"). As at 30 September 2002, there were 1,399,000 unexercised share options issued pursuant to the terms of the Pre-IPO Scheme.
- In addition, there were options granted to employees to subscribe for 1,620,000 unissued ordinary shares of $0.10 each in the Company at an exercise price of $0.59 per share pursuant to the terms of the Qian Hu Post-IPO Share Option Scheme ("Post-IPO Scheme"). As at 30 September 2002, none of these share options were exercised pursuant to the terms of the Post-IPO Scheme.
Use of Placement Proceeds
The net proceeds from the Placement exercise announced on 9 May 2002, after deducting expenses, was approximately $4.2 million. As at 30 September 2002, the amount has been partially utilized by our Group's local and overseas operations as working capital set out as follows :
|
$'000 |
| Repayment of bank borrowings |
1,400 |
| Farm enhancement, including expansion of packing room |
162 |
| Singapore plastics operations |
180 |
| China plastics operations |
36 |
| Thailand accessories operations |
25 |
| China fish & accessories operations |
145 |
|
1,948 |
12. The group's borrowings and debt securities as at the end of the financial period reported
- on, and comparative figures as at the end of the most recently announced financial
statements
| (a) Amount repayable in one year or less, or on demand | |||
|
|
|
|
|
As at 30/9/2002 |
As at 30/6/2002 | ||
|
|
|
|
|
Secured |
Unsecured |
Secured |
Unsecured |
|
|
|
|
|
Nil |
531,181 |
525,429 |
Nil |
|
|
|
|
| (b) Amount repayable after one year | |||
|
|
|
|
|
As at 30/9/2002 |
As at 30/6/2002 | ||
|
|
|
|
|
Secured |
Unsecured |
Secured |
Unsecured |
|
|
|
|
|
Nil |
1,007,725 |
996,264 |
Nil |
(c) Any other comments relating to Paragraph 12
The Group's borrowings, previously secured by a second legal mortgage on certain properties held by certain shareholders of the Company, has been discharged during the 3rd quarter of FY 2002.
13. A statement that the same accounting polices and methods of computation are followed
- in the financial statements as compared with the most recent audited annual financial
statements. Where there have been any changes or departure from the accounting policies
and methods of computation, including those required by an accounting standard, this
should be disclosed together with the reasons for the change and the effect of the change
Other than the adoption of new SAS as mentioned in paragraph 10(d) above, there were no changes in accounting policies and methods of computation adopted in the financial statements for the current reporting period as compared to the most recent audited annual financial statements as at 31 December 2001.
14. Contingent Liabilities
As at 30 September 2002, the Group and the Company have no contingent liabilities.
BY ORDER OF THE BOARD
Kenny Yap Kim Lee
Executive Chairman and Managing Director
14/10/2002