Condensed Interim Financial Statements For the Second Half Year (“2H2024”) and Full Year (“FY2024”) Ended 30 June 2024

Profit or Loss

Balance Sheet

Review of Performance

FY2024 vs FY2023

Statement of Comprehensive Income

Revenue

Business Segments:

Revenue decreased by approximately $0.9 million, or 3.0%, from $30.7 million in FY2023 to $29.8 million in FY2024. This decline was primarily due to lower sales in the Modern Trade and General Trade segments, partially offset by an increase in revenue in the Food Services and Others segments.

• Modern Trade Segment: Revenue decreased by approximately $0.8 million, or 9.5%, from $8.1 million in FY2023 to $7.3 million in FY2024, largely due to subdued consumer demand and increased product variety in the market.
• General Trade Segment: Revenue decreased by approximately $2.0 million, or 17.2%, from $11.7 million in FY2023 to $9.7 million in FY2024, mainly due to sluggish product offtake amid intense competition and weakened consumer spending power in Malaysia.
• Food Services Segment: Revenue increased by approximately $0.4 million, or 4.7%, from $7.4 million in FY2023 to $7.8 million in FY2024, primarily due to higher product sales volume in 2H2024.
• Others Segment: Revenue increased by approximately $1.5 million, or 44.0%, from $3.5 million in FY2023 to $5.0 million in FY2024, driven by higher demand for the Group’s products for export.

Geographical Information:

• Singapore Market: Revenue decreased by approximately $0.6 million, or 2.6%, from $23.0 million in FY2023 to $22.4 million in FY2024, primarily due to lower sales to Modern Trade and General Trade customers, partially offset by increased sales to customers in the Food Service segment.
• Malaysia Market: Revenue decreased by approximately $1.8 million, or 32.1%, from $5.5 million in FY2023 to $3.8 million in FY2024, mainly due to slow product offtake and weaker consumers’ spending power in Malaysia.
• Other Markets: Revenue increased by approximately $1.5 million, or 67.9%, from $2.1 million in FY2023 to $3.6 million in FY2024, primarily driven by increased export sales.

Cost of Sales

Cost of sales decreased by approximately $0.4 million, or 1.8%, from $22.9 million in FY2023 to $22.5 million in FY2024, largely in line with the decrease in revenue.

Gross Profit and Gross Profit Margin

Gross profit decreased by approximately $0.5 million, or 6.3%, from $7.7 million in FY2023 to $7.3 million in FY2024. The gross profit margin slightly declined by 0.8 percentage points, from 25.2% in FY2023 to 24.4% in FY2024, due to the factors mentioned above.

Other Income and Gains

Other income and gains increased by $0.6 million, or 114.6%, from $0.5 million in FY2023 to $1.1 million in FY2024, primarily due to a one-off $0.6 million concession from a vendor for the supply of materials.

Expenses

• Marketing and Distribution Costs: Decreased by approximately $0.2 million, or 9.4%, from $2.5 million in FY2023 to $2.3 million in FY2024, mainly due to reduced sales and promotion expenses and lower sales delivery expenses, aligning with the decrease in revenue.
• Administrative Expenses: Remained relatively unchanged at approximately $5.9 million for both FY2023 and FY2024.
• Finance Costs: Remained relatively unchanged at approximately $0.2 million for both FY2023 and FY2024.
• Other Losses: Other losses decreased by approximately $0.9 million, or 92.4%, from $1.0 million in FY2023 to $75,000 in FY2024, primarily due to a decrease in the allowance for impairment of trade and other receivables by $0.5 million, a decrease in the allowance for impairment of inventory obsolescence by $0.1 million, and a lower foreign exchange translation loss of $0.4 million due to smaller fluctuations in the Malaysian Ringgit against the Singapore Dollar.
• Share of Loss from Joint Venture: There was no share of loss from the joint venture in FY2024 due to the fully written-down value of the investment in Delta Bridge Pte. Ltd. (“Delta Bridge”) as of 30 June 2023. In the previous financial year, Delta Bridge's manufacturing site on Bulan Island was temporarily shut down due to a raw material shortage caused by the African Swine Fever detected in pigs on Bulan Island. As a result, certain impairment charges were recognised, and the investment in the joint venture was written down to $Nil as of 30 June 2023.

Income Tax Expense:

Income tax expenses increased by approximately $0.1 million, or 243.1%, from $58,000 in FY2023 to $199,000 in FY2024, mainly due to an increase in profit before income tax from the Group’s subsidiaries in Singapore.

Loss for the Financial Year:

As a result of the above, the Group incurred a loss after tax of approximately $0.2 million for FY2024, compared to a loss after tax of $1.9 million for FY2023.

2H2024 vs 2H2023

Statement of Comprehensive Income

Revenue

Business Segments:

Revenue increased by approximately $0.7 million, or 5.3%, from $13.3 million in 2H2023 to $14.0 million in 2H2024, driven by higher sales in the Food Services and Others segments, partially offset by decreased sales in the Modern Trade and General Trade segments.

• Food Services Segment: Revenue increased by approximately $0.4 million, or 11.2%, from $3.4 million in 2H2023 to $3.8 million in 2H2024, mainly due to higher product sales in 2H2024.
• Others Segment: Revenue increased by approximately $0.8 million, or 50.3%, from $1.6 million in 2H2023 to $2.3 million in 2H2024, driven by higher demand for the Group’s products for export.
• Modern Trade Segment: Revenue decreased by approximately $0.2 million, or 7.0%, from $3.6 million in 2H2023 to $3.4 million in 2H2024, largely due to subdued consumer demand amid increased product variety in the market.
• General Trade Segment: Revenue decreased by approximately $0.2 million, or 4.1%, from $4.8 million in 2H2023 to $4.6 million in 2H2024, primarily due to sluggish product offtake amid intense competition and weakened consumer spending power in Malaysia.

Geographical Information:

• Singapore Market: Revenue remained relatively unchanged at approximately $10.7 million for both 2H2023 and 2H2024.
• Malaysia Market: Revenue decreased by approximately $0.1 million, or 6.5%, from $1.8 million in 2H2023 to $1.7 million in 2H2024, primarily due to slow product offtake from customers in the General Trade segment.
• Other Markets: Revenue increased by approximately $0.8 million, or 92.7%, from $0.8 million in 2H2023 to $1.6 million in 2H2024, primarily driven by increased export sales.

Cost of Sales

Cost of sales increased by approximately $0.8 million, or 7.3%, from $10.1 million in 2H2023 to $10.9 million in 2H2024, aligning with the increase in revenue.

Gross Profit and Gross Profit Margin

Gross profit slightly decreased by $0.03 million, or 1.0%, from $3.2 million in 2H2023 to $3.1 million in 2H2024. The gross profit margin decreased by 1.4 percentage points, from 23.7% in 2H2023 to 22.3% in 2H2024, primarily due to rising material costs and freight costs.

Other Income and Gains

Other income and gains increased by $0.6 million, or 191.7%, from $0.3 million in 2H2023 to $0.9 million in 2H2024, mainly due to a $0.6 million one-off concession from a vendor.

Expenses

• Marketing and Distribution Costs: Decreased by approximately $0.1 million, or 9.1%, from $1.1 million in 2H2023 to $1.0 million in 2H2024, primarily due to lower sales and promotion expenses incurred in 2H2024.
• Administrative Expenses: Increased by approximately $0.1 million, or 4.1%, from $2.9 million in 2H2023 to $3.1 million in 2H2024, mainly due to payroll-related costs.
• Finance Costs: Decreased slightly by $13,000, or 11.1%, from $117,000 in 2H2023 to $104,000 in 2H2024. This reduction was primarily due to the termination of a lease contract.
• Other Losses: Other losses decreased by approximately $0.8 million, effectively reducing $4,000 in 2H2024. This improvement was mainly due to the absence of the following expenses recorded in 2H2023: a $0.5 million allowance for impairment of trade and other receivables, a $0.1 million allowance for impairment of inventory obsolescence, and a $0.2 million foreign exchange translation loss, which was less severe due to smaller fluctuations in the Malaysian Ringgit against the Singapore Dollar during the financial period.
• Share of Loss from Joint Venture: There was no share of loss from the joint venture in 2H2024 due to the fully written-down value of the investment in Delta Bridge as of 30 June 2023.

Income Tax Expense:

Income tax expenses increased by approximately $61,000, or 871.4%, from $7,000 in 2H2023 to $68,000 in 2H2024, mainly due to an increase in profit before income tax from the Group’s subsidiaries in Singapore.

Profit for the Financial Period:

As a result of the above, the Group recorded a loss after tax of approximately $0.2 million in 2H2024, compared to a loss after tax of $1.9 million in 2H2023.

Statement of Financial Position

The comparative commentary for both the assets and liabilities are based on the Group’s financial statements as at 30 June 2024 and 30 June 2023.

Non-current Assets

Non-current assets increased by approximately $4.7 million, from $13.9 million as at 30 June 2023 to $18.6 million as at 30 June 2024.

Property, plant and equipment (“PPE”) increased by approximately $3.5 million, from $11.1 million as at 30 June 2023 to $14.6 million as at 30 June 2024. This was primarily due to additions of PPE amounting to approximately $4.8 million in relation to the machinery and equipment acquired for the newly set up factory in Malaysia, partially offset by depreciation charges of approximately $1.3 million. Right-of-use assets decreased by approximately $0.4 million, from $2.8 million as at 30 June 2023 to $2.4 million as at 30 June 2024, mainly due to the termination of a lease contract amounting to approximately $0.1 million and depreciation charges of approximately $0.3 million. Other nonfinancial assets increased by $1.6 million from nil as at 30 June 2023, mainly due to a deposit paid for the fixed assets and renovation work for the newly set up factory in Malaysia.

Current Assets

Current assets decreased by approximately $4.8 million, from $21.9 million as at 30 June 2023 to $17.1 million as at 30 June 2024. This was primarily due to a decrease in cash and cash equivalents of approximately $3.3 million, decrease in inventories of approximately $1.6 million, and decrease in trade and other receivables of approximately $0.5 million in line with the decrease in revenue in 2H2024, partially offset by an increase in other non-financial assets of $0.6 million.

The decrease in cash and cash equivalents is further explained in the Cash Flows Statement section. The decrease in inventories reflects a combination of our efforts to maintain minimal stock levels and the timing of our order shipments.

Non-current Liabilities

Non-current liabilities decreased by approximately $0.4 million, from $5.1 million as at 30 June 2023 to $4.7 million as at 30 June 2024. This was primarily due to a decrease in lease liabilities of approximately $0.2 million, decrease in loans and borrowings of approximately $0.1 million, and decrease in other non-financial liabilities of approximately $0.1 million.

The reduction in loans, borrowings, and lease liabilities was due to repayments amounting to approximately $0.3 million during the financial period and the termination of a lease contract amounting to approximately $0.1 million.

Current Liabilities

Current liabilities increased by approximately $0.5 million, from $3.8 million as at 30 June 2023 to $4.3 million as at 30 June 2024. This increase was mainly attributable to an increase in trade and other payables of approximately $0.4 million from the increase in advances from customers, other non-financial liabilities of approximately $0.2 million, and income tax payable of approximately $0.1 million. This was partially offset by a decrease in loans, borrowings, and lease liabilities of approximately $0.3 million resulting from repayments during the year.

Statement of Cash Flows

The Group generated approximately $3.6 million in cash from operating activities. This was due to an operating cash inflow before working capital changes of approximately $1.5 million, net working capital inflows of approximately $2.2 million, reduced by tax payments of approximately $91,000.

The net working capital inflows were primarily due to a decrease in inventories of approximately $1.6 million, reduction in trade and other receivables of approximately $0.5 million, increase in trade and other payables of approximately $0.4 million, and increase in other non-financial liabilities of approximately $0.2 million, offset by an increase in other non-financial assets of approximately $0.6 million.

Net cash used in investing activities amounted to approximately $6.2 million, mainly due to the purchase of property, plant, and equipment amounting to approximately $4.8 million and deposit paid for the acquisition of plant and equipment of approximately $1.6 million, offset by interest income of approximately $0.1 million.

Net cash used in financing activities amounted to approximately $0.7 million, mainly due to the payment of lease liabilities of approximately $0.5 million and the repayment of loans and borrowings amounting to approximately $0.2 million.

As a result of the above, there was a decrease in cash and cash equivalents of approximately $3.3 million, bringing the balance to $5.6 million as at 30 June 2024, compared with $8.9 million as at 30 June 2023.

Commentary

Ongoing inflationary pressures and a high-interest-rate environment continue to influence consumer spending patterns. The Group also faces intense market competition across its operational markets. In response to these challenges, the Group remains focused on rigorous cost management, enhancing production and distribution efficiency, and intensifying marketing efforts to strengthen product awareness and drive sales.