DMX Technologies

DMX Home > Investor Relations > Financial Report

Email This Investor Relations

Financial Report

Second Quarter Financial Statement And Dividend Announcement for the Period Ended 30 June 2017

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

UNAUDITED FINANCIAL STATEMENT FOR SECOND QUARTER OF FY2017

Statements of Comprehensive Income (for the group)

Operating loss is arrived at after crediting and (charging) :



Review of Performance

Statements of Comprehensive Income

The following paragraphs should be read in conjunction with our Statements of Comprehensive Income for quarter ended 30 June 2017.

Revenue

Overview

The Group recorded a 48.9% year-on-year ("yoy") decrease in revenue to US$13.6 million in 2Q2017. The lower revenue was a result of the lower revenue in Indonesia and the other restructuring business units such as China.

ICT

The Group's "ICT" division revenue decreased 50.0% yoy to US$13.3 million in 2Q2017, which accounts for most part (97.8%) of the Group's total revenue. While the "Services" segment decreased 30.6% yoy to US$4.3 million mainly due to the overall lower revenue in the above mentioned regions.

Digital Media Services

The Group's Digital Media sales increased in 2Q2017 compare 2Q2016 due to the completion of existing ordered projects in China

Revenue from "China" region dropped 80.8% yoy to US$1.0 million in 2Q2017 mainly due to the restructuring of China operation. As a result, China's contribution reduced to 7.4% of the Group's total revenue for 2Q2017.

Revenue from "Indonesia" declined 41.4% yoy to US$10.9 million in 2Q2017 due to the swing-back from the faster pace in previous year. Indonesia's contribution, however, increased to 80.1% in 2Q2017 of the Group's total revenue due to the reduction of overall group revenue including the restructuring business units.

Meanwhile, the Group recorded 39.3% yoy drop to US$1.7 million in 2Q2017 for "Others" outside of "China" and "Indonesia" as most of these countries went through restructuring and are focusing on "Services" rather than "Hardware" sales. Revenue contribution from "Others" increased to 12.5% in 2Q2017 of the Group's total revenue due to the reduction of overall group revenue.

Gross Margin

Gross margin ratio increased 7.03% yoy to 28.36% in 2Q2017 mainly due to the higher margin ratio based on the restructuring business portfolio of the group.

Total Operating Expenses

The Group's total operating expense decreased 41.2% yoy to US$4.7 million in 2Q2017. The Group has streamlined its operation over the last years and resulted in lower operating expenses.

Loss Before Tax

The Group's loss before tax was reduced to the level of US$0.8 million in 2Q2017 compared to US$1.5 million in 2Q2016 as a result of the group optimization.

Statement of financial position

The following paragraphs should be read in conjunction with our Statements of Financial Position as at 30 June 2017.

Total current assets decreased by US$17.0 million to US$46.8 million as at 30 June 2017 compared to the last year end unaudited figures. This was largely due to the net impact from:-

  • US$3.2 million increase in cash and cash equivalents to US$9.4 million;

  • US$0.1 million increase in pledged bank deposits;

  • US$15.0 million decrease in trade receivables to US$14.8 million;

  • US$0.8 million decrease in other receivables, deposits and prepayments to suppliers; and

  • US$4.6 million decrease in indent inventories.

Aging of total trade receivables are as follows:-

The above trade receivables are with credit worthy, reputable customers and all projects are irrevocable and not from any interested party. As the Group is undertaking many projects concurrently, a task force is in place in each country to work closely with each of the telecom and the enterprise customers on the progress of their projects.

Non-current assets maintain at US$6.7 million as at 30 June 2017.

Total current liabilities have been decreased by US$14.3 million to US$31.2 million as at 30 June 2017. This was due mainly to a US$6.8 million decrease in trade and other payable; and US$5.8 million decrease in bank loan.

As at 30 June 2017, the Group's equity attributable to shareholders decreased by US$2.0 million to US$17.2 million mainly due to the loss of US$1.7million during 1H2017.

Statement of cash flows

The following paragraphs should be read in conjunction with our Statements of Cash Flows as of 30 June 2017.

The Group generated US$7.0 million of cash in operations in 2Q2017 compared to US$0.4 million utilized in 2Q2016. The Group had the decrease of trade receivables of US$9.2 million and the increase of other receivable of US$0.7 million and the decrease in inventories of US$1.2 million; of which positive impact is bigger than the decrease in trade payables of US$2.0 million in 2Q2017.

The Group utilized less than US$0.1 million of cash in investing activities for 2Q2017 as compared to US$0.3 million cash generated for 2Q2016 when the tentative proceeds on disposal of assets was incurred.

The Group has utilized US$5.4 million of cash in financing activities in 2Q2017 of which majority is due to the repayment of bank loans.

As a result of the above activities, the Group recorded an increase in cash and cash equivalents of US$1.6 million in 2Q2017, compared to the increase of US$0.1 million in 2Q2016.

Commentary

The Group remains cautious and continues to exercise prudence in view of the slower growth and challenging ICT business environment. As such, the Group is focusing on ICT business in emerging markets while shifting away from capital intensive hardware systems integration business and slimming down the operation in matured markets; which may result in lower revenue from "ICT" division.

However, the Group will continue to pursue opportunities in niche markets comprising IT security solutions, software, managed services and cloud computing. Although these solutions are relatively lower in business volume and market opportunities, they yield higher profitability and are in line with the Group's focus to generate more recurring revenue in software and services in the ICT division.

The Group sees the limitation of fund as a major obstacle in order to expand the business especially in emerging markets where capital intensive hardware systems integration is the major market opportunity.

Going forward, it is difficult for the Group to prospect for growth potential within the current "ICT" business division, while remaining vigilant due to the limitation of fund in undertaking projects with intensive working capital required.

Balance Sheet