Asiatic Group (Holdings) Limited: Financial Analysis for the Half-Year Ended 30 September 2024

Business Description

Asiatic Group (Holdings) Limited is a Singapore-based investment holding company listed on the Catalist Board of the Singapore Exchange Securities Trading Limited (SGX-ST). The company’s core business operations are divided into two main segments:

• Fire Protection Solutions: Focuses on supplying, installing, and maintaining firefighting and protection equipment.
• Energy Services: Involves power generation and the distribution of controlled power supply.

The Group operates primarily in Singapore and Cambodia.

Industry Position and Competitors

Asiatic Group (Holdings) Limited operates in the fire protection and energy services industries. The company faces competition from other firms providing similar services in these sectors. The market share and competitive dynamics were not detailed in the report.

Revenue Streams and Customer Base

The company’s revenue streams include sales of goods and services within its two business segments. The customer base spans across Singapore and Cambodia, with a minor portion from other countries.

Revenue Breakdown (6 months ended 30 Sep 2024)

• Fire Protection Solutions: S\$10,942,000
• Energy Services: S\$11,183,000

Total revenue for the half-year was S\$22,125,000, a slight increase of 0.47% from the previous year.

Financial Statement Analysis

Income Statement

The Group’s revenue increased marginally, with a notable increase in other income due to higher government grants. However, costs of sales also increased, leading to reduced profit margins. The net profit for the period declined by 50%, from S\$708,000 in 2023 to S\$354,000 in 2024.

Balance Sheet

As of 30 September 2024, the Group’s current liabilities exceeded its current assets by S\$7,926,000. Non-current assets decreased mainly due to the depreciation of USD against SGD, affecting the property, plant, and equipment values in Cambodia.

Cash Flow Statement

Net cash generated from operating activities amounted to S\$1,712,000. However, the Group experienced net cash outflows from investing and financing activities mainly due to purchases of assets and repayment of financial guarantees provided to a former associated company.

Key Findings

• Net Profit Decline: The net profit declined by 50% compared to the previous year.
• Revenue Increase: Slight increase in total revenue by 0.47%.
• Cost Management: Higher costs of sales and finance costs due to higher interest rates.
• Liquidity Concerns: The Group’s current liabilities exceed its current assets, raising concerns about liquidity.
• Arbitration and Legal Issues: Ongoing arbitration with a joint venture partner and legal claims are potential risks.

Special Activities or Actions

The Group has extended the lease of its factory building at 65 Joo Koon Circle, Singapore for another 30 years from 16 November 2023, which can be seen as a long-term commitment to its operations.

Investor Recommendations

If Currently Holding the Stock:

Consider holding the stock if you believe the company will manage its liquidity concerns and resolve ongoing legal issues effectively. Monitor the company’s cash flow and debt management strategies closely.

If Not Currently Holding the Stock:

It may be prudent to wait and observe how the company handles its current liabilities and arbitration issues before investing. The slight revenue increase is a positive sign, but the net profit decline and liquidity issues present significant risks.

Disclaimer

This analysis is based on the financial report provided and does not constitute financial advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.

Report Date

The report date is 12 November 2024, covering the financial period for the half-year ended 30 September 2024.