Annual Report 2012 - ecoWise Holdings Limited

ecoWise Holdings Limitedannual report 2012 13FINANCIAL AND OPERATIONS REVIEWRevenue from the Renewable Energy segment increased by 92.9%or S$4.77 million to S$9.91 million in FY2012. The increase wasmainly attributed to the commencement of operation of the Group’snewly completed biomass co-generation power plant at Gardens bythe Bay (Marina South, Singapore) since the first quarter of FY2012.Revenue of this segment included finance lease income attributedto the biomass co-generation power plant at Gardens by the Baybeing classified as a finance lease.Revenue from the Resource Recovery segment increased by 7.9%or S$5.88 million to S$80.33 million in FY2012. The increasewas mainly due to higher sales of the Group’s rubber compoundmanufacturing and tyre retreading businesses under SunrichIntegrated Sdn. Bhd. and its subsidiaries (“SRIT Group”).The Group’s overall gross profit margin increased from 17.1%in FY2011 to 19.6% in FY2012 mainly due to higher gross profitmargin recorded by the Renewable Energy segment due to thecommencement of operation by the biomass co-generation powerplant at Gardens by the Bay since the first quarter of FY2012.The Group’s rubber compound manufacturing and tyre retreadingbusinesses under the Resource Recovery segment also recordedslightly better margin in FY2012.Dividend income of S$0.41 million in FY2012 was received fromthe Group’s 15% investment in the electrical and electronic wastemanagement company in China, Chongqing Zhongtian ElectronicWaste Management Co., Ltd.Other credits decreased by 29.4% from S$0.78 million in FY2011to S$0.55 million in FY2012 mainly due to absence of reversal ofimpairment loss on property, plant and equipment recorded inFY2011 partially offset by higher foreign exchange gains in FY2012.Marketing and Distribution expenses increased by 16.4% fromS$3.29 million in FY2011 to S$3.83 million in FY2012. The increasewas mainly due to higher manpower costs and marketing expensesincurred by the Group’s rubber compound manufacturing and tyreretreading businesses in line with increased business activities.Administrative expenses increased by 23%from S$7.49 million in FY2011 to S$9.22million in FY2012. The increase was mainlydue to higher staff costs (increased byS$0.93 million), rental expenses, upkeepand utilities as well as legal and consultancyfees incurred. The Group incurred higherlegal fees mainly due to the acquisitionof land and leasehold property underthe Resource Recovery segment whilsthigher consultancy fees were incurred inconnection with business development inventure capital and cleantech sectors.Finance costs increased by 19.1% from S$0.87million in FY2011 to S$1.04 million in FY2012due to an increase in the Group’s loans andborrowings. The increase was mainly attributedto finance costs incurred on the Group’sinvestment in the biomass co-generationpower plant at Gardens by the Bay (increasedby S$0.18 million), acquisition of land andleasehold property by SRIT Group (increasedby S$0.05 million) and working capital of SRITGroup (increased by S$0.03 million).Depreciation of property, plant andequipment increased by 12.2% to S$3.15million in FY2012 mainly due to a generalincrease in the Group’s depreciableassets in FY2012 when compared to thecorresponding period in FY2011.Other charges of S$0.85 million in FY2012were mainly attributed to equity settledshare-based expenses of S$0.53 million,impairment loss on property, plant andequipment of S$0.19 million and otherfinancial assets of S$0.07 million.