Miyoshi Limited Announces Material Variances in FY2024 Financial Results

Miyoshi Limited: Financial Analysis Report (Net Loss Increased by 41%)

Business Description

Miyoshi Limited is incorporated in Singapore and operates as a group along with its subsidiaries. The company’s core business includes manufacturing and providing precision engineering products and services. The company operates across multiple geographic regions, including Singapore, Malaysia, the Philippines, and China.

The company’s position within the industry is not explicitly mentioned, but given its emphasis on investment properties, property valuation, and precision engineering, it likely competes with other regional precision engineering firms. No specific information regarding market share or key competitors is provided in the report.

Revenue Streams and Operations

The revenue streams of Miyoshi Limited are not elaborated in the provided report. However, key operational highlights include property, plant, and equipment management as well as investment properties. The company’s operational adjustments suggest a focus on cost restructuring and improving asset utilization.

Financial Analysis

Income Statement

Net Loss: The company reported a loss before income tax of S\$3.03 million for FY2024, a 41% increase from the unaudited figure of S\$2.16 million.
Other Income: Decreased significantly by 57% (S\$1.73 million lower) due to variances in property and investment valuations and reclassification adjustments.
Other Operating Expenses: Decreased by 8% (S\$712,000 lower), attributed to reclassification and foreign exchange adjustments.
Reversal of Loss Allowance: The audited results showed income of S\$178,000 from subsequent collections of receivables in Malaysia, which was not included in the unaudited figures.

Balance Sheet

Bank Borrowings: Reclassified between current and non-current liabilities, resulting in a net adjustment of S\$2.65 million.
Investment Properties: Decreased by S\$367,000 due to downward fair value adjustments from independent valuation.
Property, Plant, and Equipment: Decreased by S\$222,000 due to net adjustments of disposals and purchases.
Prepayments: Declined by 73% (S\$221,000) due to adjustments across subsidiaries in different regions.

Cash Flow Statement

Net Cash from Operating Activities: Declined by 25% (S\$395,000), primarily due to adjustments in working capital and tax paid.
Net Cash Used in Investing Activities: Improved significantly by 90% (S\$732,000 lower usage), reflecting reduced outflows for property and equipment purchases.
Net Cash Used in Financing Activities: Increased by 23% (S\$312,000), attributed to reclassification of lease liabilities and adjustments in bank borrowings.

Key Strengths

Reversal of Trade Receivables Impairment: Indicates improved collections from customers in Malaysia.
Cost Adjustments: Reduction in operating expenses and better cash flow from investing activities demonstrate the company’s efforts to streamline operations.

Key Risks

Increased Net Loss: A 41% increase in net loss before income tax reflects ongoing financial challenges.
Investment Property Valuation: Downward adjustments in property values may indicate potential market instability or reduced demand.
High Borrowings: Significant bank borrowings and reclassification between current and non-current liabilities highlight potential liquidity risks.

Special Activities

The company is taking steps to improve profitability through operational cost adjustments, reclassification of liabilities, and focusing on collections of receivables. However, no explicit mention of strategic growth initiatives or expansion plans is provided.

Recommendations

For Current Investors

Hold the stock if already invested, but exercise caution. The company is making efforts to improve its financial position, but the increased net loss and reduced asset valuations are concerning. Monitor future announcements for signs of recovery or further challenges.

For Potential Investors

Avoid investing at this time due to the increased net loss and high borrowings. Consider waiting for clearer signs of operational stability or profitability improvement before taking a position in the stock.

Disclaimer

This recommendation is based solely on the information provided in the company’s audited financial report for FY2024, dated 27 January 2025. It does not consider external market conditions or other factors that may affect the stock’s performance. Investors are encouraged to conduct further research or consult a financial advisor before making investment decisions.