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Financials

Full Year Results Financial Statement And Related Announcement


Financials Archive

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Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income

Condensed Interim Statements of Financial Position

Review of Performance

Consolidated Statement of Profit or Loss

Results for second half year ended 31 March 2024

In the second half year ended 31 March 2024 ("2H2024"), the Group derived turnover on continuing operations from the aesthetic medical service ("AMS") and part of the mechanical business unit ("MBU"). The part of the MBU where the results are excluded refers to the subsidaries Honfoong Plastic Industries Pte Ltd and PT Honfoong Plastic Industries (collectively,"MBU-HF"). The exclusion is due to partial disposal of HF-MBU and is classified separately from the Group's turnover as discontinued operations. The Group completed sale of MBU-HF on 29 September 2023, effectively reducing the shareholdings in MBU-HF to 40%. The electonic business unit ("EBU") had also been classified separately from the Group's turnover as discontinued operations, due to it being approved for the sale by shareholders through an extraordinary general meeting held on 5 July 2023. The disposal of the EBU by Jubilee Industries Holdings Ltd ("Jubilee") was completed on 29 August 2023. Please refer to Jubilee's announcements for more details. Turnover recorded from continuing operations was S$8.4 million. Comparing the Group's continuing operations turnover, this represents a decrease of S$10.0 million as compared to S$18.4 million for the second half year ended 31 March 2023 ("2H2023"). For the avoidance of doubt, S$9.2 million of S$18.4 million in 2H2023 relates to MBU-HF.

AMS provided through Accrelist Medical Aesthetics group of companies, branded as A.M Aesthetics, in 2H2024 generated a revenue of S$7.1 million with loss before income tax of S$1.4 million. Compared to 2H2023, revenue decreased by 4.7% or S$0.4 million from S$7.5 million in 2H2023. The increase in loss after tax of approximately S$1.2 million from loss of S$0.2 million in 2H2023 to loss of S$1.4 million in 2H2024 is mainly due to the substanial increase in hiring and training of employees for the increase in clinics with the acquisition of SJY Medical Pte. Ltd. ("SJY"), and also hiring and training of employees for the potential set up of new clinics. In addition, with the Group's acquisition of SJY, it would take time to train the employees to that like A.M Aesthetics so as to turnaround SJY to profitability. SJY contributed to loss through incurring losses of S$0.4 million.

Turnover of MBU was constant at S$1.7 million in both 2H2024 and 2H2023. The net loss has increased from S$0.2 million in 2H2023 to S$0.3 million in 2H2024. The dip was predominantly due to the softening demand in MBU division.

Turnover and gross profit from other businesses was a negative of S$0.4 million and S$0.2 million in 2H2024 as compared to 2H2023 of S$0.003 million and S$0.006 million respectively. This was mainly due to an adjustment made for the over recognition of revenue.

GP% for the MBU had substantially improved from negative 20.5% in 2H2023 to a positive 33.5% in 2H2024. This was due to cost containment measurements which was implemented in MBU since September 2023. GP% for AMS has also improved by 19.6% from 13.9% to 33.5% in 2H2023 and 2H2024 respectively. This is mainly due to the rise in sale of products and services with greater margins.

Other (losses)/gains, net for 2H2024 is made up of other income and other losses of S$0.05 million and S$0.9 million respectively. For 2H2023, it amounted to only other income of S$3.9 million. Other income decreased by S$3.9 million from $3.9 million in 2H2023 to S$0.05 million in 2H2024. The decrease was due mainly to a gain on disposal of associated company, gain on disposal of financial assets, at FVPL, reversal of defined employee benefit, and receipt for amount previously written off of S$0.6 million, S$1.6 million, S$0.3 million, and S$0.8 million respectively in 2H2023, where there was no occurence of such in 2H2024. Other losses increased by S$0.9 million from nil in 2H2023 to S$0.9 million for 2H2024. The increase is due to reversal of gain from bargain purchase, goodwill written off and foreign exchange loss of S$0.2 million, S$0.2 million, and S$0.5 million respectively in 2H2024 where this situation was not present in 2H2023.

Total operating expenses increased from S$4.3 million in 2H2023 to S$6.6 million in 2H2024. Marketing and distribution expenses increased by approximately S$0.5 million or greater than 100.0% from S$0.1 million in 2H2023 to S$0.6 million in 2H2024. This is from the increased efforts to enhance brand recognition of AMS due to payment for advertisements via social media platforms. Administrative expenses for the Group increased by S$1.8 million from S$4.0 million for 2H2023 to S$5.8 million for 2H2024. The increase was mainly due to higher staff-related costs associated with the AMS to cope with the increase in clinics. The increase in clinics did not generate increased revenue due to the start up cost incurred. Finance expenses remained relatively constant at S$0.2 million for both 2H2024 and 2H2023. Discontinued operations had increased from a loss of S$7.0 million to a profit of S$7.5 million and this refers to the disposal of the EBU and MBU-HF. With the disposal of MBU-HF, it is an associated company of the Group and incurred a loss of associate of S$0.5 million. Net profit increased from a loss of S$6.9 million in 2H2023 to a profit of S$2.4 million in 2H2024. This is mainly due gain on disposal of associated company and gain on disposal of financial assets, at FVPL in 2H2023 where there was no occurence of such in 2H2024. This increase is offset by the losses of AMS.

Results for full year ended 31 March 2024

In the financial year ended FY2024, the Group recorded a turnover of S$16.7 million. The Group recorded total turnover from continuing operations derived from the AMS and MBU, excluding the results from MBU - HF. The EBU and MBU-HF are classified separately from the Group's turnover as discontinued operations. Comparing the Group's continuing operations turnover, this represents an decrease of S$19.8 million as compared to S$36.5 million for the financial year ended FY2023. For the avoidance of doubt, S$17.4 million of S$36.5 million in FY2023 relates to MBU-HF.

AMS in FY2024 generated a revenue of S$13.3 million with loss before income tax of S$2.1 million. Compared to FY2023, revenue decreased by 5.6% or S$0.8 million from S$14.1 million. The decrease was largely due to COVID-19 no longer being a global health emergency with limited traveling restrictions, where individuals are now extending their spending to overseas and travelling rather than spending locally. The increase is loss after tax is also due to the substantial increase in hiring and training of employees for the increase in clinics with the acquisition of SJY, and also hiring and training of employees for the potential set up of new clinics. In addition, with the Group's acquisition of SJY, it would take time to train the employees to that like A.M Aesthetics so as to turnaround SJY to profitability. SJY contributed to loss through incurring losses of S$0.4 million.

Turnover of MBU was S$3.3 million in FY2024, a decrease of S$1.7 million or 33.2% compared to S$5.0 million in FY2023. The net loss has improved by S$1.0 million from a loss of S$1.3 million in FY2023 to a loss of S$0.3 million in FY2024. The decrease is turnover is attributed mainly to slower demand in plastic injection amidst stiff competition, slower growth of global economy towards the end of financial year amidst rising interest rate and translation of the MBU overseas subsidiary into the Group's reporting currency via strengthening Singapore Dollars. As a result, the Group is taking the direction to secure new customers from other regions to propel the revenue stream. Meanwhile, geopolitical tensions has continued creating challenges as our customers are holding back their manufacturing, resulting in weaker demands and delays in project launches for end of life product models. Despite this, the net loss improved as the MBU had embarked on several initiatives to improve cost management, as well as seeking qualification for alternative sources of raw materials and raising operational efficiencies to mitigate higher raw material cost.

Gross profit decreased by S$0.5 million or 8.2% from S$5.9 million in FY2023 to S$5.4 million in FY2024 with overall GP% of the Group increased by 16.2% from 16.1% in FY2023 to 32.4% in FY2024. GP% for AMS was 33.0% in FY2024, a decrease of 10.7% compared to 43.7% in FY2023. This is due to the substanial increase in hiring and training of employees for the increase in clinics with the acquisition of SJY, and also hiring and training of employees for the potential set up of new clinics. As for the MBU, the market supply of resin, which was a key raw material for MBU remained tight due to logistic issues, stemming from shortage of labour, rising inflation and delays in shipping schedules exacerbated by disruptions in resin production. Despite these challenges, MBU had embarked on several initiatives to improve cost management, as well as seeking qualification for alternative sources of raw materials and raising operational efficiencies to mitigate higher raw material cost. As the result, MBU's gross profit margin rebounded from negative 17.6% in FY2023 to positive 28.0% in FY2024.

Other (losses)/gains, net for FY2024 is made up of other income and other losses of S$0.7 million each. For FY2023, it amounted to S$3.8 million and S$0.2 million respectively. Other income decreased by S$3.1 million from S$3.8 million in FY2023 to S$0.7 million in FY2024. The decrease was due mainly to a gain on disposal of associated company, gain on disposal of financial assets, at FVPL, reversal of defined employee benefit, and receipt for amount previously written off of S$0.6 million, S$1.6 million, S$0.3 million, and S$0.8 million respectively in FY2023, where there was no occurence of such in FY2024. Other losses increased by S$0.5 million from S$0.2 million in FY2023 to S$0.7 million for FY2024. The increase is mainly due to forex losess from the weakening Singapore Dollar of approximately S$0.7 million. The increase is offset by the decrease by the bad debts written off of S$0.2 million which was present only in FY2023.

Total operating expenses decreased from S$11.5 million in FY2023 to S$11.2 million in FY2024. Marketing and distribution expenses remained relatively constant at S$1.2 million in FY2023 to S$1.3 million in FY2024. Administrative expenses for the Group decreased by S$0.2 million from S$10.0 million for FY2023 to S$9.8 million for FY2024. Administrative expenses decreased as a result of MBU-HF being classified as discontinued operations which amounted to S$1.7 million. This decrease is offset by the increase in AMS administrative expenses of S$1.3 million from S$4.5 million in FY2023 to S$5.8 million in FY2024. The increase was mainly due to higher staff-related costs associated with the AMS to cope with the increase in clinics. Finance expenses decreased by S$0.1 million or 19.6% to S$0.2 million in FY2024 from S$0.3 milion in FY2023. The decrease was mainly due to lesser bank interest from the paydown of lease liabilities and bank loans. Net loss for decreased by S$8.1 million from a loss of S$10.0 million in FY2023 to a loss of S$1.9 million in FY2024. This is mainly due gain on disposal of associated company and gain on disposal of financial assets, at FVPL in FY 2023 where there was no occurence of such in FY2024.

Consolidated Statements of Financial Position

Non-current assets comprised property, plant and equipment, intangible assets, investment in associated company, other assets, and financial assets at fair value through other comprehensive income. Total non-current assets decreased by 4.9% from S$7.1 million as at 31 March 2023 to S$6.7 million as at 31 March 2024. The decrease is mainly due to the reduction in property, plant and equipment of $1.8 million as a result of depreciation in the financial year. This decrease is offset by the increase in investment in associated company of S$0.9 million. With the sale of MBU-HF, the Group has 40% shareholdings resulting in MBU-HF being accounted for as an associated company. The decrease is also offset by the increase in other assets of S$0.5 million due to the increase in rental deposits from the acquisition of SJY and deposits placed for rental of fitness and medical equipments of our AMS Malaysian subsidiary.

Current assets comprised other assets, trade and other receivables, inventories, financial assets at fair value through profit or loss, cash and cash equivalents, tax recoverable, and assets of disposal group classified as held for sale. Total current assets amounted to S$24.4 million as at 31 March 2024 as compared to S$53.1 million as at 31 March 2023. The decrease of S$28.7 million is is mainly attributable to the disposal of EBU which was classified as "Assets of disposal group classified as held for sale" as at 31 March 2023 of S$33.8 million.This decrease is offset by the increase in trade and other receivables arising from the uncompleted payments from disposal of EBU and MBU-HF which amounted to approximately S$10.1 million. In addition, with the change of MBU-HF being an associate company, the borrowings are not eliminated in the consolidated financial statements.

Non-current liabilities comprised borrowings. Total non-current liabilities amounted to S$1.7 million as at 31 March 2024 as compared to S$2.9 million as at 31 March 2023. The decrease is largely due to paydown of lease liabilities and bank loans obtained for aesthetic machines purchased for the expansion of the current medical aesthetic clinics to larger units, and the potential of opening of new clinics.

Current liabilities comprised borrowings, trade and other payables, contract liabilities, income tax payable, and liabilities directly associated with disposal group classified as held for sale. Total current liabilities amounted to S$7.4 million as at 31 March 2024 as compared to S$31.5 million as at 31 March 2023. The decrease is mainly due to the disposal of EBU and HF-MBU, with its liabilities classified as "Liabilities directly associated with disposal group classified as held for sale" of S$17.7 million as at 31 March 2023 and this also resulted in the decrease in trade and other payables. In addition, the decrease in current liabilities is also due to the reduction in borrowings, which is mainly due to paydown of lease liabilities and bank loans.

The Group had reported a positive working capital of S$17.0 million as at 31 March 2024. Working capital decrease by S$4.7 million as compared to S$21.7 million as at 31 March 2023. This decrease is mainly due to due to the disposal of EBU and MBU-HF where the latter had greater current assets than current liabilities.

Consolidated Statement of Cash Flows

Net cash flow used in operating activities for FY2024 was S$8.3 million, comprising operating loss before working capital changes of S$9.9 million, working capital inflow of S$1.4 million, interest recevied of S$0.3 million, and income tax paid of S$0.1 million. The working capital inflow was mainly due to the decrease in inventories and increase in trade and other payables and contract liabilities of S$0.04 million and S$7.0 million respectively. This was offset by the increase in trade and other receivables and contract assets and other assets of S$5.2 million and S$0.4 million.

Net cash provided by investing activities for FY2024 of S$5.4 million was mainly due to proceeds of partial disposal of subsidiary and advance to related parties amounting to S$3.2 million and S$2.5 million, offset with the purchase of property, plant and equipment of S$0.3 million respectively.

Net cash used in financing activities of S$3.0 million was largely due to repayment of borrowings, lease liabilities and interest of S$1.1 million, S$2.1 million, and S$0.2 million respectively. This cash used was offset by the issuance of shares of S$0.4 million. The Group recorded a net decrease in cash and cash equivalents of S$5.9 million for FY2024.

Commentary

The Group’s AMS segment has remained relatively consistent. This is supported by resilient demand with favourable long-term prospects. Amidst an ageing population with rising affluence, the growing acceptance and accessibility of minimally invasive procedures has also opened new opportunities as younger customers and men also begin to seek aesthetic treatments.This situation results in more aesthetic clinics being set up leading to stiffer competition.

In Singapore, the Group continues to position A.M Aesthetics as one of the market leaders while pursuing network expansion. The Group successfully completed its acquisition of 51% equity interest in SJY in July 2023 and have since been rebranded under the A.M Aesthetics brand. In addition, other existing clinics have also been expanded to serve more customers.

Beyond Singapore, A.M Aesthetics continues to seek growth opportunities across the region. The Group’s wholly-owned subsidiary, Accrelist Medical Aesthetics (BM) Pte. Ltd., has incorporated a company in Thailand, Accrelist Medical Aesthetics (Bangkok) Co., Ltd., and a company in the People’s Republic of China, Accrelist Medical Aesthetics (Hainan) Co., Ltd., for the purpose of expanding its medical aesthetics business. We will continue to expand regionally to broaden the Group’s AMS revenue stream beyond Singapore, with a focus on tapping into new growth opportunities in China.

Besides growth in medical aesthetic clinics, the Company is expanding its business on clinical skin care products through its subsidiary, A.M Skincare. A.M Skincare has developed ODM products with advisory and inputs from the Korean dermatologist. It also carries non-ODM skin products which are renowned brands from Korea. At current, this ODM products are sold in the clinics and online through A.M Aesthetics website. The Company also has a plan to set up a retail shop and will provide further update in due course.

The global business landscape remains challenging for MBU, shrouded by the persistent social and economic uncertainties associated with the escalating oil prices, rising interest rates and steep inflation. The volatility of foreign exchange against the US dollar, weakening Singapore dollar and rising crude oil prices have affected resin prices, the principal raw material for the Group’s MBU. With higher logistics costs as well as continuous pricing pressures from customers, the Group foresees business headwinds to continue for the next financial year. For further details on MBU, please refer to Jubilee's full year result announcement dated 30 May 2024.

The Group is currently actively assessing new potential businesses for investment and will update shareholders in due course should any suitable opportunities arise.

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