Ni Hsin Berhad Annual Report 2017

Annual Report 2017 Ni Hsin Resources Berhad (653353-W) 9 Financial Performance Review For the financial year ended 31 December 2017 (“FY2017”), the Group achieved a total revenue of RM39.6 million which was 4.8% higher than the total revenue achieved in FY2016 of RM37.8 million. The higher revenue recorded was mainly due to improved sales orders in the convex mirror and clad metal segments. Gross Profit (“GP”) margin achieved during the year improved by 2.2% compared to the previous year. The Group recorded a Profit Before Taxation (“PBT”) of RM2.6 million in FY2017 against a Loss Before Taxation of RM4.6 million in FY2016. The LBT incurred in FY2016 was mainly due to the recognition of the Employees’ Share Option Scheme (“ESOS”) fair value of RM5.03 million. The other factors that contributed to the difference in profitability include better profit margins for cookware and clad metal and net gains in fair value of quoted shares and disposal of quoted shares of RM1.56 million and RM0.26 million respectively in FY2017. Consequently, the Group achieved a Profit After Taxation (“PAT”) of RM2.07 million in FY2017 compared to a Loss After Taxation (“LAT”) of RM5.02 million recorded in FY2016. The Group’s net assets per share as at 31 December 2017 increased to RM0.37. The Group’s non-current assets decreased to RM53.24 million compared with the non-current assets of RM55.71 million as at 31 December 2016 due to depreciation charges and disposals of plant and equipment of the Group. Inventories increased to RM20.19 million as at 31 December 2017 due to advance purchase of raw materials. Receivables, deposits and prepayments decreased by RM1.62 million to RM3.95 million due to better collections from customers. The Group’s net current assets was RM30.52 million as at 31 December 2017. The Group is in a positive net cash position as at 31 December 2017 with cash and cash equivalent of RM9.44 million after deducting all borrowings of the Group. The Group’s net operating cash inflow for FY2017 was RM3.74 million. The net cash outflow from investing activities was RM1.75 million, mainly due to acquisition of quoted shares and purchases of plant and equipment after deducting proceeds from the disposal of quoted shares and disposal of plant and equipment respectively. Net cash inflow from financing activities was RM3.63 million, mainly attributable to the proceeds from exercise of warrants. The net resultant impact to the Group’s cashflow was an increase in cash of RM5.62 million during FY2017. Net cash and cash equivalents amounted to RM9.44 million as at 31 December 2017. Management Discussion And Analysis (continued)