Financial Analysis of Lion Asiapac Limited – Net Profit Decline
Business Description
Lion Asiapac Limited is a Singapore-based company listed on the Singapore Exchange Securities Trading Limited (SGX-ST). The company operates through four main segments:
- Supply of roofing solutions for metal roofing and wall cladding
- Lime sales
- Trading of steel consumables and mining equipment
- Investment holding
Geographically, the company operates primarily in Malaysia, Australia, Singapore, and China, with Malaysia being the main hub for lime sales, trading, and roofing solutions.
Industry Position
Lion Asiapac Limited competes within the industrial materials sector, primarily against other suppliers of roofing solutions and lime products. The company’s market share details are not explicitly stated in the report, but its diversified operations across various geographies and sectors provide it with a competitive edge.
Revenue Streams
The company’s revenue streams are as follows:
- Supply roofing solution: \$3.91 million
- Lime sales: \$3.99 million
- Trading: \$0.37 million
The customer base includes industries requiring roofing solutions, lime for industrial use, and steel consumables. The company’s supply chain involves sourcing raw materials and distributing finished products across its operational regions.
Financial Statement Analysis
Income Statement
For the first quarter ended 30 September 2024, the company reported a revenue decline of 20% to \$8.3 million compared to the same period last year. The net loss after tax was \$0.157 million, down from a profit of \$0.136 million in the previous year.
Key points include:
- Revenue: \$8.3 million (down 20%)
- Net loss: \$0.157 million (compared to a profit of \$0.136 million)
- Other income and gains decreased by 41% to \$0.486 million
- Increased finance costs by 121% to \$0.104 million
Balance Sheet
As of 30 September 2024, the company’s total assets stood at \$76.1 million, with total liabilities at \$14.3 million. Shareholders’ equity including non-controlling interests amounted to \$61.8 million.
Key points include:
- Property, plant, and equipment increased by \$0.5 million to \$4.0 million
- Trade and other receivables decreased by \$2.7 million to \$13.0 million
- Inventories increased from \$9.1 million to \$10.8 million
Cash Flow Statement
The company generated \$1.1 million from operating activities and recorded a breakeven in investing activities. Financing activities generated \$1.9 million, mainly due to borrowing drawdowns and decreased fixed deposit pledges.
Key points include:
- Net cash from operating activities: \$1.1 million
- Net cash from financing activities: \$1.9 million
- Cash balances increased by \$1.1 million to \$43.4 million
Dividends
No dividends were declared for the period as the company opted to conserve cash for future operations.
Special Activities
The company is currently involved in arbitration proceedings concerning a Share Purchase Agreement dated 1 September 2023. The outcome of this arbitration is yet to be determined.
Investment Recommendation
For Current Investors
If you are currently holding Lion Asiapac Limited stock, it is recommended to hold your position. Despite the current net loss, the company’s strong cash position and ongoing business activities suggest potential for future growth.
For Potential Investors
If you are not currently holding Lion Asiapac Limited stock, it is advisable to wait and monitor the company’s performance in the coming quarters. The ongoing arbitration proceedings and current financial performance indicate uncertainty.
Disclaimer
This analysis is based on the unaudited financial statements for the first quarter ended 30 September 2024. The recommendations provided are for informational purposes only and do not constitute financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.
Date of Report: 1 November 2024
