Listed Companies' Announcement

MASNET No. 71 OF 20.08.2004

Announcement No. 71

NH CERAMICS LTD


Full Year Financial Statement for the Period Ended 30/06/2004


PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3),

HALF-YEAR AND FULL YEAR RESULTS

corresponding period of the immediately preceding financial year.

as at the end of the immediately preceding financial year.

Amount repayable in one year or less, or on demand



As at 30/06/2004

As at 30/06/2003

Secured	Unsecured	Secured	Unsecured
8,184	527	7,522	274



Amount repayable after one year



As at 30/06/2004

As at 30/06/2003

Secured	Unsecured	Secured	Unsecured
3,774	0	4,831	0



Details of any collateral

The Group's borrowings are secured by the following:
- Legal mortgage on a subsidiary's leasehold properties and freehold property
- Debenture by way of charge over a subsidiary's machinery
- Corporate guarantee

the corresponding period of the immediately preceding financial year.

The Board notes that, despite the loss before tax of $1.78 million in FY2004, following the $2.25 million loss before tax in FY2003, the Group managed to generate positive net cash of $1.00 million from operating activities in FY2004. This compares favourably against a corresponding net cash deficit of $0.37 million in FY2003.

(ii) changes in equity other than those arising from capitalisation issues and
distributions to shareholders, together with a comparative statement for the
corresponding period of the immediately preceding financial year.

bonus issue, share buy-backs, exercise of share options or warrants, conversion of
other issues of equity securities, issue of shares for cash or as consideration for
acquisition or for any other purpose since the end of the previous period reported
on. State also the number of shares that may be issued on conversion of all the
outstanding convertibles as at the end of the current financial period reported on
and as at the end of the corresponding period of the immediately preceding
financial year.

There is no change in the Company's issued share capital since the last financial year.

which auditing standard or practice.

The figures have not been audited or reviewed by auditors.

any qualifications or emphasis of a matter).

NA

issuer's most recently audited annual financial statements have been applied.

The Group has adopted the same accounting policies and methods of computation in the financial statements for the current reporting period as those in its audited financial statements as at 30 June 2003.

including any required by an accounting standard, what has changed, as well as
the reasons for, and the effect of, the change.

NA

on and the corresponding period of the immediately preceding financial year,
after deducting any provision for preference dividends.

capital of the issuer at the end of the:-

(a) current financial period reported on; and
(b) immediately preceding financial year.

understanding of the group's business. It must include a discussion of the
following:-

(a) any significant factors that affected the turnover, costs, and earnings of the
group for the current financial period reported on, including (where applicable)
seasonal or cyclical factors; and

(b) any material factors that affected the cash flow, working capital, assets or
liabilities of the group during the current financial period reported on.

The operating subsidiaries of the Group are Nam Huat Tiling & Panelling Co Pte Ltd ("NHTP"), Nam Tat Pte Ltd ("NT") and Living Elements Pte Ltd ("LE").

NHTP, established in 1963 and currently in its 42nd year of operations, is a major supplier, stockist and distributor of ceramic and marble tile products and other building finishing materials to public and private sector projects & retailing to renovation contractors and homeowners.

NT, which commenced full operations in January 2004, is a distributor and supplier of economy ranges of ceramic tiles directly to interior design & renovation contractors in Retail residential and office renovations.

LE, which commenced full operations in February 2004, is a 'Design & Renovate' firm specialising in home and office renovations and refurbishments.

The turnover of the Group for FY2004 is $17.15 million, a decrease of 22.4% ($4.96 million) from the $22.11 million recorded in FY2003.

Turnover for the first 6 months of FY2004 ended 31st December 2003 is $9.59 million. This is a decrease of 23.5% from the $12.54 million recorded in the corresponding period of FY2003 ended 31st December 2002. This resulted in a loss before tax of $0.93 million for the interim period ended 31st December 2003.

Turnover for the second 6 months of FY2004 ended 30th June 2004 is $7.56 million. This is a decrease of 21.0% from the $9.57 million recorded in the corresponding period of FY2003 ended 30th June 2003. This resulted in a loss before tax of $0.85 million for the 6 months ended 30th June 2004.

The Board notes, however, that despite a lower turnover for the Group in the second 6 months of FY2004 of $7.56 million, as compared with the first 6-month period of $9.59 million, losses before tax between the two periods have been reduced significantly to $0.85 million from $0.93 million through concerted cost reductions.

However, arising from the further drop in revenue, which could not be adequately offset against reduction in operating expenses for the year, the Group incurred a loss before tax of $1.78 million for FY2004. This is against a loss before tax of $2.25 million recorded in FY2003.

The $0.47 million reduction in Group losses for FY2004 resulted mainly from a $1.69 million gain from (i) increase in gross profits arising from higher selling prices ($0.89 million); (ii) reduction in operating expenses ($0.72 million); and (iii) increase in other income ($0.08 million). This was offset by a $1.22 million loss from (i) reduction in turnover ($1.12 million); (ii) increase in depreciation ($0.07 million); (iii) increase in interests paid ($0.03 million).

In the material supply Project Segment, amidst the continued poor economic environment and a weak construction industry where many major construction firms are facing serious financial difficulties, the Group retained a cautious approach in the bid for projects. Total Project turnover declined by 34.8% ($5.86 million) to $10.95 million in FY2004 from $16.81 million in FY2003.

The Group's Project order book, as at 30th June 2004, stands at $7.19 million. This compares favourably against the order book at 31st December 2003, 30th June 2003, 31st December 2002 and 30th June 2002 at the end of each of the previous 6-monthly periods, of $4.76 million, $6.91 million, $6.45 million and $8.61 million respectively. The Board notes that the Project order book has finally signalled a reversal in declining Project orders secured over the past 24 months, which had led to correspondingly declining Group turnover for FY2003 and FY2004.

The material supply Retail Segment recorded a marginal 3.4% ($0.18 million) decline in turnover, to $4.75 million in FY2004 from $4.92 million in FY2003, as home renovations continue to be held back or down-scaled. The entry by NT with budget ranges helped to increase the market share of the Group in a declining overall Retail market. The Directors expect NT to contribute positively to Group profits in the current financial year.

LE commenced full operations in February 2004 but was unable to complete sufficient renovation contracts by the end of June 2004 to contribute positively to the Group for the current financial year. Barring any unforeseen circumstances, the Directors expect LE to contribute positively to the Group profits in the current financial year.

shareholders, any variance between it and the actual results.

Nil

competitive conditions of the industry in which the group operates and any
known factors or events that may affect the group in the next reporting period
and the next 12 months.

The Group expects improvements to its turnover and profitability for the current financial year, as demand for building finishes is anticipated to pick up from the doldrums of the past two years, against a significantly much improved business environment resulting from the fall out of competing firms.

The Group has also reviewed operational and financial policies and strategies, with new emphasis in maintaining an asset-light operating capability and further enhancing revenue capabilities.

Financial consolidation and re-structuring would include disposal of fixed assets or investments which weigh heavily on the working capital and resources of the Group. An investment property of the Group had already been sold for $1.22 million during the financial year, with a marginal profit on disposal, thereby reducing Group bank borrowings. Other disposals of surplus or less efficient fixed assets would continue to be effected during the current financial year. The Directors expect the financial position and cash flow of the Group to be improved during the current financial year so as to escalate the growth of the businesses of the Group thereof.

Strategies to enhance revenue and synergise the subsidiary businesses of the Group, for the longer term, would be executed during the current financial year. Such measures include the securing of a lease rental with HDB for a new 25,000 sq. ft. Show-House for the Group at HDB Centre, Podium B, Jalan Bukit Merah. This Show-House will greatly consolidate and enhance the Group's efforts to continually expand Retail businesses and strengthen the Brand Name of NH Ceramics. The Show-House will have two adjoining but separate Showrooms for NHTP and NT respectively. The Show-House is expected to be operational in early 2005. LE, operating at the E-Centre building located nearby along the same Jalan Bukit Merah, will also enhance the presence and identification of the Group.

In line with the new financial-restructuring of the Group, the Directors intend to dispose of the current properties at Hougang and Kembangan, which house the existing NHTP showrooms, and repay bank borrowings. This is expected to reduce the gearing of the Group and improve deployment of working capital in anticipation of a positive turnaround in revenue of the Group.

Barring unforeseen circumstances, the Directors are optimistic of a better performance by the Group, with the objective of a recovery to profitability, in current FY2005.

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? None
(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year? Yes



Name of Dividend	Interim
Dividend Type	Cash
Dividend Amount per Share (in cents)	0.3 cents per ordinary share (less tax)
Optional:- Dividend Rate (in %)	1.5 % per ordinary share
Par value of shares	S$0.20
Tax Rate	22%



(c) Date payable

NA


(d) Books closure date

NA

No dividend has been declared/recommended since the end of the previous financial year ended 30 June 2003.

(This part is not applicable to Q1, Q2, Q3 or Half Year Results)

group) in the form presented in the issuer's most recently audited annual financial
statements, with comparative information for the immediately preceding year.

contributions to turnover and earnings by the business or geographical segments.

Please refer to the preceding paragraph 8.

full year and its previous full year.

Total Annual Dividend (Refer to Para 16 of Appendix 7.2 for the required details)



	Latest Full Year (S$'000)	Previous Full Year (S$'000)
Ordinary	0	304
Preference	0	0
Total:	0	304