Oceanus Group Limited Issues Detailed Responses to SGX Queries on FY2025 Financial Statements

Oceanus Group Limited has released a comprehensive response to queries from Singapore Exchange Securities Trading Limited (SGX-ST) concerning its unaudited financial statements for the fiscal year ended 31 December 2025. The responses address key areas that are relevant to shareholders and may potentially impact the company’s share price.

1. Compliance with SGX Disclosure Requirements

Oceanus confirmed compliance with the SGX-ST Listing Manual, specifically Part II of Appendix 7.2. The company has provided segmented revenue and breakdown of sales by business segments—Distribution, Services, and Others—for FY2025 and FY2024. This segmentation is crucial for investors to assess performance across the company’s operational areas.

Additionally, Oceanus stated that, as per Listing Rule 704(13), there are no persons occupying managerial positions who are relatives of directors, chief executive officers, or substantial shareholders within the company or its principal subsidiaries for FY2025 and up to the date of response. This reduces risks related to conflicts of interest and governance concerns.

2. Significant Increase in Trade Payables

One notable development is the substantial rise in trade payables from S\$9.46 million at the end of FY2024 to S\$14.19 million at the end of FY2025. This increase is primarily driven by higher purchases to support a surge in trading activity and inventory build-up.

• Revenue Growth: Oceanus reported revenue growth from S\$165.1 million in FY2024 to S\$185.3 million in FY2025, suggesting healthy expansion.
• Inventory Growth: Inventories jumped from S\$18.5 million to S\$48.1 million, indicating strategic stockpiling.
• Funding Mix: While the group utilized revolving facilities and trade finance lines for working capital, normal supplier credit terms remained integral, leading to higher period-end payables.

Investors should note that this increase in trade payables may impact liquidity ratios, and the company’s ability to manage supplier relationships and working capital is crucial going forward.

3. Goodwill Adjustment Clarified

Oceanus clarified a potential point of confusion regarding goodwill accounting. The company did not write off or impair goodwill. Instead, goodwill increased from S\$216,000 to S\$1,156,000 due to the finalisation of acquisition accounting and purchase price allocation for a relevant acquisition. The S\$940,000 adjustment was a result of this process, not a write-off.

This clarification is important for shareholders since goodwill adjustments can significantly impact reported profits and asset values. The company has committed to using the correct terminology (“Adjustment to goodwill”) in future disclosures to avoid misunderstandings.

4. Breakdown of Other Payables

Oceanus provided a breakdown of other payables, which rose from S\$8.36 million in FY2024 to S\$9.79 million in FY2025. The composition includes:

• Professional Fees: S\$711,000 (auditors, tax agents, corporate secretary, legal counsel)
• Interest Expenses: S\$1.26 million (third-party lenders)
• Long-standing Balances: S\$4.23 million (various legacy balances from before the restructuring, still recognized pending resolution)
• Accrued CPF: S\$87,000 (Central Provident Fund Board)
• GST Output Tax: S\$112,000 (Inland Revenue Authority of Singapore)
• Accrued Marketing Expenses: S\$984,000 (digital marketing agencies)
• Other Accruals and Operating Payables: S\$2.40 million (various third-party vendors, mainly for selling, general, and administrative expenses)

The presence of substantial legacy balances (S\$4.23 million) is noteworthy. Oceanus states these are historical balances carried forward from before the restructuring exercise and remain unresolved but recognized as a matter of prudence. Investors should monitor the progress in resolving these balances, as their eventual settlement could impact cash flows or result in write-offs.

Potential Price-Sensitive Issues for Shareholders

• The rapid increase in both trade payables and inventories may affect liquidity and risk profiles, especially if these trends continue or if inventory turns are slow.
• Clarification of goodwill accounting removes the risk of perceived impairment but indicates the company is actively acquiring and integrating new businesses.
• The legacy balances under other payables could pose future risks if not resolved; shareholders should track management’s actions here.
• Overall revenue growth is positive, but it comes with higher procurement and financing needs, raising questions about capital management and future profitability.

Conclusion

Oceanus Group Limited’s responses offer transparency on several financial statement items and clarify accounting practices that could have been misinterpreted. The increase in trade payables, inventories, and other payables, alongside goodwill adjustment, are all factors investors should monitor closely. The company’s growth is evident, but so are increased operational risks and capital requirements. Shareholders are advised to pay particular attention to the resolution of legacy balances and the efficiency of inventory management.

Disclaimer: This article is intended for informational purposes only and does not constitute financial advice or a recommendation to buy or sell securities. Investors should conduct their own research and consult professional advisors before making investment decisions.

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