Listed Companies' Announcement

MASNET No. 42 OF 29.09.2003

Announcement No. 43

NH CERAMICS LTD


Full Year Financial Statement


PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year




					Group
					30/06/2003	30/06/2002
					S$'000	S$'000
Revenues from supply of building materials
Project sales					16,812	24,773
Retail sales					4,922	6,050
Revenues from interior design & renovation					375	-
Dividend income from unquoted subsidiary					-	-
					22,109	30,823
Costs and expenses
Changes in stocks of trading goods					(1,609)	(194)
Purchases and services consumed					(15,527)	(21,972)
Salaries and employee benefits					(2,572)	(2,901)
Depreciation					(997)	(964)
Other operating expenses					(3,156)	(3,744)
Other income					149	334
Financial costs					(644)	(761)
					(24,356)	(30,202)
(Loss) / profit before taxation					(2,247)	621
Taxation					341	(169)
(Loss) / profit attributable to shareholders					(1,906)	452



(Loss) / profit before taxation is stated after (charging) / crediting the following:



					Group
					30/06/2003	30/06/2002
					S$'000	S$'000
Bad trade debts recovered					48	11
Write-back of provision for doubtful trade debts					7	8
Provision for diminution in value of club membership / quoted investments					-	(55)
Provision for doubtful debts					(57)	(93)
Goodwill written off					(100)	-
Interest expenses					(580)	(680)
Gain on disposal of fixed assets					48	26
Provision for stock obsolescence					(631)	(243)
Write-back of stocks written off					471	171
Loss / (gain) on disposal of quoted investments					(204)	6
Foreign exchange gain / (loss)					192	266




1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year




			Group		Company
			As at	As at	As at	As at
			30/06/2003	30/06/2002	30/06/2003	30/06/2002
			S$'000	S$'000	S$'000	S$'000
Fixed assets			14,851	15,315	-	-
Investments			1,090	733	-	-
Subsidiaries			-	-	10,396	10,396
Due from subsidiaries (non-trade)			-	-	5,214	3,120
Current assets
Stocks			10,677	12,286	-	-
Trade debtors			5,532	6,167	-	-
Other debtors, deposits and prepayments			715	1,011	90	76
Cash and bank balances			85	199	11	8
			17,009	19,663	101	84
Current liabilities
Trade creditors			3,199	6,304	-	-
Bills payable to banks (secured)			3,620	2,389	-	-
Progress billings in excess of work-in-progress			66	-	-	-
Other creditors and accruals			416	431	65	79
Provision for taxation			-	587	-	-
Bank term loans (current portion)			5,952	4,428	-	-
Bank overdrafts			1,809	191	-	-
Lease obligation (current portion)			35	271	-	-
			15,097	14,601	65	79
Net current assets			1,912	5,062	36	5
Non-current liabilities
Bank term loans (non-current portion)			4,698	5,803	-	-
Lease obligations (non-current portion)			133	231	-	-
Deferred taxation			512	356	-	-
			12,510	14,720	15,646	13,521
Equity
Share capital			12,996	12,996	12,996	12,996
Share premium			197	197	197	197
(Accumulated loss) / reserves			(683)	1,527	2,453	328
			12,510	14,720	15,646	13,521




1(b)(ii) Aggregate amount of group's borrowings and debt securities

Amount repayable in one year or less, or on demand



As at 30/06/2003

As at 30/06/2002

Secured	Unsecured	Secured	Unsecured
7,522	274	4,863	27



Amount repayable after one year



As at 30/06/2003

As at 30/06/2002

Secured	Unsecured	Secured	Unsecured
4,831	0	6,034	0



Details of any collateral

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


1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year




					Group
					01/07/2002 to	01/07/2001 to
					30/06/2003	30/06/2002
					S$'000	S$'000
Cash flow from operating activities
(Loss) / profit before taxation					(2,247)	621
Adjustment for:
Bad trade debts recovered					(48)	(11)
Write-back of provision for doubtful trade debts					(7)	(8)
Provision for diminution in value of club membership / quoted investments					-	55
Provision for doubtful trade debts					57	93
Depreciation of fixed assets					997	964
Goodwill written off					100	-
Interest expenses					580	680
Gain on disposal of fixed assets					(48)	(26)
Provision for stock obsolescence					631	243
Write-back of stocks written off					(471)	(171)
Loss / (gain) on disposal of quoted investments					204	(6)
Operating cashflow before working capital changes					(252)	2,434
Decrease / (increase) in assets
Stocks					1,449	122
Trade debtors					633	3,349
Other debtors, deposits and prepayments					593	(497)
(Decrease) / increase in liabilities
Trade creditors and bills payable to banks					(1,874)	545
Other creditors and accruals					(15)	(269)
Progress billings in excess of work-in-progress					66	-
Cash generated from operations					600	5,684
Interest paid					(580)	(680)
Income taxes paid					(387)	56
Net cash (used in) / generated from operating activities					(367)	5,060
Cash flow from investing activities
Investment in subsidiary, net of cash					(100)	-
Investment in quoted equity shares					(239)	(595)
Proceeds from sales of quoted equity investments					250	341
Proceeds from sales of fixed assets					52	32
Purchase of fixed assets					(452)	(1,140)
Investment in freehold property					(573)	(490)
Net cash used in investing activities					(1,062)	(1,852)
Cash flow from financing activities
Net proceeds of bank term loans					419	2,363
Repayment of lease obligations					(418)	(488)
Dividends paid to shareholders					(304)	(299)
Net cash (used in) / generated from financing activities					(303)	1,576
Net (decrease) / increase in cash and cash equivalents					(1,732)	4,784
Cash and cash equivalents at beginning of year					8	(4,776)
Cash and cash equivalents at end of year					(1,724)	8




1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (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




			Share	Share	Accumulated	Total
			capital	premium	profit / (loss)	equity
			S$'000	S$'000	S$'000	S$'000
Group
As at 01/07/2001			12,996	197	1,374	14,567
Net profit for the year			-	-	452	452
Dividend paid			-	-	(299)	(299)
As at 30/06/2002			12,996	197	1,527	14,720
As at 01/07/2002			12,996	197	1,527	14,720
Net loss for the year			-	-	(1,906)	(1,906)
Dividend paid			-	-	(304)	(304)
As at 30/06/2003			12,996	197	(683)	12,510
Company
As at 01/07/2001			12,996	197	235	13,428
Net profit for the year			-	-	392	392
Dividend paid			-	-	(299)	(299)
As at 30/06/2002			12,996	197	328	13,521
As at 01/07/2002			12,996	197	328	13,521
Net profit for the year			-	-	2,429	2,429
Dividend paid			-	-	(304)	(304)
As at 30/06/2003			12,996	197	2,453	15,646




1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares or 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.


2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard)

The figures have not been audited or reviewed by auditors.


3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of matter)

NA


4. Whether the same accounting policies and methods of computation as in the 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 2002.


5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change

NA


6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends




					Group
					30/06/2003	30/06/2002
					Cents	Cents
(Loss) / earnings per share based on (loss) / profit attributable to shareholders
* Based on existing issued share capital					(2.93)	0.69
** Based on fully diluted basis					(2.93)	0.69


* (Loss) / earnings per share for the year ended 30 June 2003 and 2002 are computed based on 64,977,825 number of shares in issue.

** There have been no potentially dilutive securities in issue during the year.


7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year




			Group		Company
			As at	As at	As at	As at
			30/06/2003	30/06/2002	30/06/2003	30/06/2002
			Cents	Cents	Cents	Cents
* Net asset value per ordinary share based on existing issued share capital as at the end of the period reported on			19.25	22.65	24.08	20.81


* The net asset value per share is computed based on issued shares of the Group and Company as at 30 June 2003 and 2002.


8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. The review must discuss 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. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on

The main operating subsidiary of the Group is Nam Huat Tiling & Panelling Co Pte Ltd ("NHTP"), whose activities remain unchanged as 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.

Full year FY2003 turnover totalled $22.11 million, which saw a decrease of 28.3% ($8.71 million) from the $30.82 million recorded in FY2002.

Arising from the significant drop in revenue, which could not be adequately offset against reduction in operating expenses for the year, the Group incurred a loss after tax of $1.91 million for FY2003. This is against a net profit after tax of $0.45 million recorded in FY2002.

			Group		Group
			FY2003		FY2002
Turnover			S$'000	%	S$'000	%
Project Segment
Public Sector			9,652	43.6	17,595	57.1
Private Sector			7,160	32.4	7,178	23.3
Retail Segment			4,922	22.3	6,050	19.6
Interior Design & Renovation Segment			375	1.7	n/a	n/a
			22,109	100.0	30,823	100.0

In the Project Segment, amidst the continued poor economic environment, the Group maintained the cautious approach with tight management of projects, materials, manpower deployment, payments and receivables. The ranges and levels of ready stocks of the Group in our Tuas facility, continued to provide added advantages for the Group to secure a bigger share of the shrinking project market. This is especially evident in the Private Sector, which recorded only a marginal decline in turnover, despite the slower pace of new residential development during the financial year. Total Project turnover, however, declined by 32.1% ($7.96 million), to $16.81 million in FY2003 from $24.77 million in FY2002.

The Group's project order book, as at 30th June 2003, stands at $6.91 million. This comprises 18 private sector and 28 public sector projects. The Group continues to exercise prudence in the securing of projects to reduce the risk of credit losses, and emphasised extreme care in project management to guard against counter-claims and punitive losses. This caution is reflected in the comparison against the order book at 30th June 2002, at the end of the previous financial year, of $8.61 million, which comprised 13 private and 38 public sector projects.

The Retail Segment recorded a 18.7% ($1.13 million) decline in turnover, to $4.92 million in FY2002 from $6.05 million in FY2002, as home renovations are generally held back or down-scaled.

During the financial year, the Group wholly acquired Living Elements Pte Ltd ("LEPL"), an interior design & renovator firm, broadening the reach of the Group within the domestic Home Renovation business and initiating another revenue base of the Group. LEPL contributed a turnover of only $0.37 million for FY2003. This was on account of a priority post–acquisition programme to uplift, strengthen and enhance the operational capabilities of LEPL before the launch of the new entity.

LEPL will be housed and launched from a new industrial premise at #01-10 E-Centre@Redhill at Jalan Bukit Merah, purchased by the Group in September 2003 for $1.34 million.


9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results

Nil


10. A commentary at the date of the announcement of the 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

Demand for building finishes is expected to remain depressed for the current financial year, as the lack of demand continues to take its toll on the industry members.

Since the 1998 Asian crisis, against a shrinking market pie, the Group had been consolidating, instituting internal cost-cutting measures and had reviewed and tightened operational controls and management. More significantly, the Group had been preparing new corporate and marketing programmes to strengthen its position in all sectors of the industry, to continually increase its market share, widen its revenue bases and add on new growth engines.

The Group launched a new web-based "NH - VIRTUAL SHOWROOM" <www.nhceramics.com.sg>, during FY2003. This virtual showroom, an industry first in Singapore, is expected to extend the reach to consumers and industry consultants alike, especially to regional home-owners in Malaysia, Indonesia, Brunei and Thailand.

Three other major programmes by NHTP and its subsidiaries, Nam Tat Pte Ltd and Living Elements Pte Ltd, are also ready to be launched consecutively over the next few months of this current financial year. All these are expected to contribute positively to Group results for current FY2004 ending 30th June 2004.

Barring unforeseen circumstances on the roll-outs and initial take-offs, the Directors anticipate better results for the Group in FY2004, with the objective of a recovery to profitability in FY2004.



11. Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on? Yes



Name of Dividend	Interim
Dividend Type	Cash
Dividend Rate	0.3 cents per ordinary share (less tax)
Par value of shares	S$0.20
Tax Rate	22%



(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	Final
Dividend Type	Cash	Cash
Dividend Rate	0.3 cents per ordinary share (less tax)	0.3 cents per ordinary share (less tax)
Par value of shares	S$0.20	S$0.20
Tax Rate	22%	22%



(c) Date payable

NA


(d) Books closure date

NA


12. If no dividend has been declared/recommended, a statement to that effect

NA

13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year





		Building Materials		Interior Design	Adjustments
		Project	Retail	& Renovation	&
		Segment	Segment	Segment	Eliminations	Group
		S$'000	S$'000	S$'000	S$'000	S$'000
2003
Turnover		16,812	4,922	375	-	22,109
Profit / (loss) before taxation		1,397	(3,384)	(135)	(100)	(2,222)
Unallocated expenses						(25)
Taxation						341
Net loss for the year						(1,906)
Assets		13,176	19,671	103	-	32,950
Liabilities		10,057	10,037	178	-	20,272
Unallocated liabilities						168
Total liabilities						20,440
Capital expenditure		76	145	316	-	537
Depreciation		376	578	43	-	997
2002
Turnover		24,773	6,050	-	-	30,823
Profit / (loss) before taxation		1,173	(510)	-	-	663
Unallocated expenses						(42)
Taxation						(169)
Net profit for the year						452
Assets		14,693	21,018	-	-	35,711
Liabilities		10,656	9,833	-	-	20,489
Unallocated liabilities						502