Financials
For the 6 months ended 30 June 2007
Income Statement
Group |
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| Half Year 30-Jun-07 $'000 |
Half Year 30-Jun-06 $'000 |
Increase/(Decrease) % |
|
| Revenue | 8,127 | 1,697 | 379 |
| Cost of Sales | (6,031) | (1,103) | 447 |
| Gross Profit | 2,097 | 594 | 253 |
| Other income | 555 | 166 | 233 |
| General and Administrative Costs | (2,907) | (1,612) | 80 |
| Other Operating (Expenses)/Income | (42) | (64) | (34) |
| Operating Profit / (Loss) | (297) | (915) | (68) |
| Finance Costs | (80) | (12) | 586 |
| Profit / (Loss) before taxation | (377) | (928) | (59) |
| Taxation | - | (15) | N.M. |
| Profit / (Loss) after taxation | (377) | (943) | 60 |
N.M. denotes Not Meaningful
Group |
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| Half Year 30-Jun-07 $'000 |
Half Year 30-Jun-06 $'000 |
|
| Gain from disposal of fixed assets | 32 | - |
| Interest income on bank deposits | 2 | 3 |
| Dividends received from quoted investments | 4 | 160 |
| Gain/(loss) on disposal of quoted investments | - | 1 |
| Other miscellaneous income | 517 | 3 |
| Investment related expenses | (9) | (16) |
| Bank Charges | (25) | (11) |
| Fair value of changes in financial instruments - (loss)/gain on held of trading quoted shares | 180 | (17) |
| Net foreign exchange gain/(loss) | (41) | 29 |
| Write down of stock | - | (28) |
| Depreciation of fixed assets | (146) | (51) |
| Amortisation of intangible assets | (2) | (1) |
Click here for the complete Half Year 2007 Financials
Click here for the Full Year 2006 Financials
Review of Performance
(a) Turnover and Profit/Loss
Turnover for the group increased significantly by 379% to $8.1 million. This is largely due to the consolidation of our newly acquired subsidiary. CarrierNet's voice business into the Group since completion on 15 March 2007. Revenue from CarrierNet's business at $6.5 million is derived from both wholesale carrier, retail calling cards and IDD services. The LCD business contributed $1.1 million or 13% of the total group revenue. The revenue also included a service fee of $0.5 million from Telcom United.
Other income of $0.6 million included $0.5 million of one-off non-recurring technical service fee from Telcom United.
The cost of sales increased by 447% to $6.0 million due to the consolidation of CarrierNet's business. General and administrative expenses increased by 80% mainly because of the inclusion of addition operating expenses incurred by our new voice business unit, CarrierNet.
For the half year ended 30 June 07, the Group made a loss after tax of $0.4 million, an improvement of 60% over the same period 2006.
(b)Balance Sheet and Cash Flow
The Group's fixed assets increased by $2.9 million due mainly to the addition of CarrierNet's assets. Trade receivables, other receivables, trade payables and accruals, and other payables including interest-bearing loans and borrowings were significantly higher compared to the preceding year as a result of the acquisition of CarrierNet.
The Group's acquisition of CarrierNet has to be accounted for in accordance with FRS 103, Business Combinations. A Purchase Price Allocation exercise is currently being carried out which will determine fair values of CarrierNet's identifiable assets, liabilities, contingent liabilities and goodwill at the date of acquisition. The intangible assets, which may include intellectual property rights and goodwill, are subject to impairment reviews and accordingly the carrying value of the intangible assets may differ significantly from the amounts reflected in the balance sheet.
The increase in trade and other receivables give rise to increase in outflow of cash from the operations from $0.9million to $1.7 million.
A net cash outflow of $1.5 million on investing activities arose mainly from the acquisition of CarrierNet. In the prior year, investing activities of $1.9 million inflow was due largely to the disposal of short term investment.
From its financing activities, the Group raised a net cash of $4.8 million from issues of new shares and conversion of warrants.
Commentary On Current Year Prospects
In FY2006, the Group put in place critical "building blocks" to enter the telecommunications sector. We are pleased to announce the completion of the acquisition of CarrierNet and the addition of their voice business in the wholesale, retail and VoIP markets. CarrierNet is currently building up new markets in Vietnam, US, UK and Japan as it aggressively seeks new growth in different markets.
The recent acquisition of Telcom United 1515, a leading voice service operator in Singapore, together with CarrierNet in Hong Kong, will help to strengthen ArianeCorp's position as a telecom player. We expect to reap synergies arising from these two companies as their strengths and the market conditions they operate in are very similar.
For the fibre optic network, we are seeking strategic investors to help light up the project. We are also exploring synergies with CarrierNet China on how to leverage the network.
With the continuing positive outlook in the Telecommunications sector, the Group expects the 2 telecom companies to be significant contributors in the next 12 months. ArianeCorp will also actively seek out new opportunities in the telecom companies thus enabling us to realize our vision of being a key Telecommunication Service Provider in the region.
Balance Sheet
| Group 30-Jun-07 S$'000 |
Group (Audited) 31-Dec-06 S$'000 |
|
| Non-current assets | ||
| Fixed assets | 43,863 | 40,990 |
| Intangible assets | 14,538 | 14 |
| Investment in subsidiary companies | - | - |
| Other investments | 306 | 306 |
| 58,707 | 41,310 | |
| Current assets | ||
| Stocks | 541 | 578 |
| Trade receivables | 2,690 | 255 |
| Other receivables | 2,588 | 1,094 |
| Short-term investments | 661 | 626 |
| Amount due from subsidiary companies | - | - |
| Cash and cash equivalents | 1,918 | 479 |
| 8,398 | 3,032 | |
| Current liabilities | 3,221 | 803 |
| Trade Payables and accruals | 1,059 | 449 |
| Other payables | - | - |
| Amount due to subsidiary companies | 2,232 | 166 |
| Interest-bearing loans and borrowings | 279 | 34 |
| Lease creditor | 279 | 34 |
| Provision for taxation | 181 | 195 |
| 6,972 | 1,647 | |
| Net current assets | 1,426 | 1,385 |
| Non-current liabilities | ||
| Other payables | 10,915 | 10,915 |
| Deferred Taxation | 85 | - |
| Lease creditor | 114 | 128 |
| 11,114 | 11,043 | |
| 49,019 | 31,652 | |
| Capital and reserves | ||
| Share capital | 57,956 | 40,715 |
| Foreign currency translation reserve | (10,633) | (11,135) |
| Revenue reserve/(accumulated losses) | 1,695 | 2,072 |
| 49,019 | 31,652 |