Dip In Tuan Sing 4Q Earnings

tuan sing Tuan Sing Holdings Limited (SGX: T24) announced its 4Q and annual results on 29 January 2014 after the market closed. Incorporated on 13 March 1969 to manufacture polypropylene bags, the company underwent a restructuring exercise to become an investment holding company on 20 September 1983 under its present name, Tuan Sing Holdings Limited (“TSH”). The Group operates in 4 business segments; Property, Industrial Services, Retail and Investments in Hotels, and Printed Circuit Board Manufacturing.

Tuan Sing’s FY2013 revenue declined 19% from S$371.8 million to S$302.3 million from a year ago while net profit tumbled 55% from S$109.5 million to S$52 million in the same year. The plunge in net profits can be attributed to several reasons, including:

  • The decrease in top line was due to lower property development sales as previous projects have already been accounted for – Mont Timah project 100% sold, while 88% of the units in its Seletar Park Residence was taken up
  • A further recognition of losses in Pan-West resulted in a drop of profits of S$5.5 million from its share of results of associates and jointly-controlled companies
  • The lower contributions were also due to a significant drop on the net fair value gain from its investment properties; S$27.2 million as compared to S$67.7 million a year earlier.

Financial Position

Total assets increased 30% from S$1,375.2 million to S$1,783.3 million mainly due to the acquisition of Robinson Point and development expenditures capitalised for ongoing development and investment projects.

However, total liabilities surged 55% to S$1,024.1m as the borrowings were to fund acquisition of Robinson Point and used for the redevelopment of Robinson Tower site. Correspondingly, net borrowings (total borrowings less cash and bank balances) soared 84% to S$640.8m; with net gearing rising in tandem to 0.84 times, up from 0.48 times at the previous year end.

Free cash flow was in a negative position of -S$104m due to the substantial increase of investing cash flow from S$37.6m to S$177.2m and almost 50% decline in operating cash flow from S$145.8m to S$732.2m compared to a year ago.

Nevertheless, total cash & cash equivalent increased slightly to S$212.6m primarily with the increase in net financing cash-flow of $104.5m, reflecting a net drawdown of loans, payment of interest and dividend.

Foolish Bottom-line

Tuan Sing Holdings Limited closed Wednesday at S$0.285 and are selling for 6.33 times earnings. The directors have proposed a dividend of 0.5 cent per share for FY2013, bringing the total year payout to 0.01 cents, translating into a dividend yield of 3.51%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.