Key Facts:
- Reporting Period: The report covers the six months ending on December 31, 2023, for the financial year FY2024.
- Revenue Decline: Group revenue decreased significantly by 66% to S$3.48 million for Q2 FY2024 and by 69% to S$5.97 million for the six months ended December 31, 2023, compared to the same periods in 2022.
- Net Loss: The Group reported a net loss of S$3.37 million for the six months ending December 31, 2023, compared to a net profit of S$725,000 for the same period in 2022.
- Employee Expenses: Employee benefit expenses decreased by 74% to S$1.44 million in the six months ended December 31, 2023, due to the disposal of medical and dental clinics.
- Other Operating Expenses: There was an increase in other operating expenses, particularly driven by foreign exchange losses.
- Finance Costs: Decreased significantly by 47% to S$0.32 million due to lower borrowing levels.
- Dividends: No dividends have been declared for the period ending December 31, 2023, citing accumulated losses as the reason.
Special Notes for Investors:
- Moratorium and Restructuring: The company is under a moratorium granted by the Singapore High Court, with restructuring efforts ongoing to reorganize liabilities and preserve core business value. The company has formulated a “pre-packaged” scheme of arrangement to address debts, which was approved by the court on December 1, 2023. The scheme includes options for creditors to convert part of the debt to equity or receive a cash payment.
- Rescue Financing: The largest creditor, Ontario, provided rescue financing of up to S$5.9 million to help stabilize the company, which gives priority over other debts.
- Acquisitions: The Group has acquired Tianjin Zhoushun Logistics Co., Ltd., which is indirectly involved in coal storage and sales. This is part of the Group’s plan to enhance its portfolio.
- Voluntary Liquidations: The Group has placed some subsidiaries, such as Healthsciences International Pte. Ltd., under voluntary liquidation.
Investor Actions:
For Current Shareholders:
- Hold Position: Given the company’s ongoing restructuring efforts and the backing of a key creditor providing rescue financing, current investors should consider holding onto their shares to see if the restructuring plan brings future growth potential through the company’s recovery efforts and new acquisitions.
For Potential Investors:
- Wait and Watch: For those not currently invested, it may be prudent to wait until the company successfully completes its restructuring and demonstrates sustainable profitability. The ongoing uncertainty and potential risks surrounding the restructuring process suggest a cautious approach.
Special Activities to Improve Profitability:
- Restructuring Scheme: The company’s approval of a restructuring scheme involving debt conversion and a cash option for creditors is a key step toward stabilizing its financial situation. The restructuring aims to reduce debt and improve the company’s capital structure.
- Asset Sales: Disposal of non-core assets, including medical and dental clinics, is part of the company’s strategy to focus on core business areas and improve financial health.
- Acquisitions: The acquisition of Tianjin Zhoushun Logistics Co., Ltd. reflects the company’s efforts to expand into new markets and businesses.
Disclaimer:
This recommendation is based solely on the content of the financial report and current restructuring efforts. All investment decisions should be made in consultation with financial advisors and based on personal risk tolerance.
