[caption id="attachment_2604" align="alignright" width="150" caption="Photo by Hythe Eye"][/caption]
On February 5, 2010, GRP released their 1H FY 2010 results. Considering the Company has hardly any news and updates in 6 months (it does not report quarterly), suffice to say this was quite a “momentous” event indeed! I immediately sat down to thoroughly run through its financials, commentary and to read about its plans and prospects. I shall now do an analysis and summary here and offer my comments on what to expect from the company in the next 6 months.
Profit and Loss Analysis
Disappointingly, revenues had dipped 5.4% from S$13.4 million in 1H FY 2009 to S$12.7 million in 1H FY 2010. In one traces back further, revenues had dipped 11.5% from 1H FY 2008 to 1H FY 2009, from S$15.2 million to S$13.4 million, so this is a 2-year continuous decline and does not bode well as it appears to be an effect of the global financial crisis; which has crimped demand for GRP’s products. This is probably also a result of oil prices which have remained low and which has affected its Hoses and Marine segment.
If one breaks down the revenue contribution, Hoses and Marine contributed S$5.54 million (43.6% of total) for 1H 2010, up 13.2%; Metrology and Measuring Instruments division contributed S$6.61 million (52% of total), down 12.9%; and uPVC Pipes and Fittings contributed S$0.57 million (4.5% of total), down 40.9%. Hoses and Marine had increased its contribution to 43.6%, up from just 39.7% in FY 2009. This is actually positive news as Hoses and Marine has traditionally registered much higher gross margins than Metrology division, and Metrology’s share of revenues has dipped from 54.3% for FY 2009 to the current 52%. However, gross margins dipped from 38.9% to 35.9% as a result of more intense competition, and the better performance for Hoses and Marine was attributed to upgrading projects at two oil terminals. It remains to be seen if this is a one-off event or if the Company can look for more of such opportunities to boost revenues for their most profitable division. Read more...