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Half Year Financial Statement Announcement And Related Announcement

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Condensed Interim Financial Statements For the six months ended 30 June 2024

Condensed consolidated statement of profit or loss

Condensed consolidated statement of comprehensive income

Review of performance of the Group

Sales

Group revenue for 1H 2024 totalled $82.2 million, 9% lower than 1H 2023.

Logistics activities accounted for about 87% of the Group’s revenue in 1H 2024. Revenue from logistics activities decreased by 1% to $71.9 million mainly due to lower revenue from supply chain management services and transportation services.

Revenue from property management decreased by 80% to $1.4 million, mainly due to the expiration of the lease at The Grandstand on 31 December 2023.

Revenue from ship repair and marine engineering decreased by 13%, mainly due to lower revenue from ship repair and fabrication works.

Costs and Profitability

Cost of sales decreased by 9% or $5.9 million, in line with the drop in revenue from supply chain management services, transportation services and ship repair & marine engineering.

Gross profit decreased by 9% from $22.1 million in 1H 2023 to $20.1 million in 1H 2024, mainly due to lower gross profit margins from Property management and Ship repair and marine engineering activities.

Other income increased by 11% to $2.0 million in 1H 2024. Interest income decreased by 46% in 1H 2024, mainly due to decrease in bank deposits and cash at bank.

Other gains were higher compared to 1H 2023.

Administrative expenses increased by 1%, mainly due to higher costs for corporate functions.

Finance costs decreased by 16% to $5.9 million, mainly due to repayment of borrowings.

Share of profit of associated companies of $2.5 million was contributed by the Group’s 40% shareholdings in COSCO SHIPPING Bulk SEA (“COSCO SHIPPING Bulk”), 40% shareholdings in PT. Ocean Global Shipping Logistics, 30% shareholdings in SINOVNL Company Limited, and 49% shareholdings in Goldlead Supply Chain. The increase in share of profit of associated companies was mainly due to higher profit contribution from COSCO SHIPPING Bulk.

Income tax expense increased by 12% to $2.3 million mainly due to higher profits as compared to 1H 2023.

Overall, net profit attributable to equity holders was $2.3 million, 16% higher than 1H 2023, mainly due to higher share of profit of associated companies and lower interest expense, partially offset by lower profit margins and lower interest income.

Balance Sheet
(30 June 2024 vs 31 December 2023)

Cash and cash equivalents decreased from $66.7 million to $54.8 million, mainly due to net cash used in repayment of borrowings and interest payments, partially offset by net cash provided by operating activities. Please refer to Consolidated Statement of Cash Flows for more details.

Trade and other receivables increased by $2.3 million to $49.5 million (31 December 2023: $47.2 million).

Property, plant, and equipment decreased by $11.0 million to $640.5 million, mainly due to depreciation expense recognised in 1H 2024.

Trade and other payables decreased by $6.1 million to $31.4 million, mainly due to the repayment of trade payables.

Total borrowings decreased by $10.7 million to $251.1 million, mainly due to repayment of borrowings from Singapore and Malaysia.

Shareholder’s equity increased by $2.5 million to $489.6 million mainly due to profit for the period, offset by currency translation losses.

Cash Flow

Net cash provided by operating activities for 1H 2024 was $14.1 million. This was mainly due to working capital requirements for operations. Please refer to Consolidated Statement of Cash Flows for details.

Net cash used in investing activities for 1H 2024 was $6.2 million. This was mainly due to cash used for further investment in an associated company.

Net cash used in financing activities for 1H 2024 was $18.4 million. This was mainly due to the repayment of borrowings and interest.

Commentary

In 1H2024, the unstable global geopolitical situation and high interest rates have had an impact on global economic recovery. In July 2024, the International Monetary Fund released the World Economic Outlook Update, predicting a global growth rate of 3.2% for 2024, lower than the 3.3% global growth rate in 2023. Against such background, global economic conditions will remain challenging.

In April 2024, Cogent Holdings Pte. Ltd., a wholly-owned subsidiary of the Company, entered into a joint venture agreement with Eastern (1961) Holding Pte. Ltd., pursuant to which the two parties have incorporated a joint venture company to carry out the business of providing container body repairs, as well as container body maintenance and modifications for customers in Singapore and other Southeast Asian countries.

In March 2023, the Company announced that it had signed a joint venture agreement with an affiliated company, Supply Fortune Limited (“SF”), to jointly invest in logistics infrastructure and resource development, focusing on the development of the logistics supply chain business in Southeast Asia. Subsequently, the two parties established a joint venture company named Goldlead Supply Chain Development (Southeast Asia) Limited, with Supply Fortune Limited holding 51% and the Company holding 49% of the issued shares. The joint venture aims to become a digital supply chain investment and operating platform, providing customers with enhanced digital supply chain solutions by improving supply chain service capabilities. After the establishment of the joint venture, both parties are actively exploring digital supply chain infrastructure and resource investment projects such as warehouses, depots, and trailer fleets in Southeast Asia. In June 2024, Goldlead allotted and issued a total of 10,000,000 new ordinary shares for a total consideration of US$10 million against the amounts received from the Company and SF in proportion to their existing shareholding in Goldlead, thereby increasing Goldlead’s share capital from US$10,000 to US$10.01 million. With such increased capital, Goldlead will have better financial capabilities to invest in logistics supply chain businesses.

Regarding the Jurong Island Logistics Hub Phase II project, Cogent Jurong Island Pte. Ltd. has completed the feasibility study report and risk assessment report, and has now appointed the relevant consultants.

Following the expiry of the lease for The Grandstand on December 31, 2023, Cogent Land Capital Pte. Ltd. ventured into several new business areas: Superapp Vehicle Platform, Carpark management of 250 public lots and a partnership with STA Inspection Pte. Ltd. to install 2nd generation On Board Unit in Singapore registered vehicles. Cogent Automotive Logistics Pte. Ltd. has continued to conduct automobile sales and storage operations at other locations and conducted online automobile showroom operations through the SuperApp digital platform.

The Company will continue to monitor the development of the logistics market in Singapore, Malaysia and Southeast Asia even as global economic conditions remain challenging. It will invest in and build logistics supply chain infrastructure and resources at the appropriate time, expand the logistics supply chain network, and strive to become a leading comprehensive logistics and supply chain service company in the Southeast and South Asia. The Company remains committed to long-term sustainable development, making efforts to bring better returns to its shareholders.

Condensed Balance Sheets - Group