Financial Statements and Related Announcements: Second Quarter Results

NSL LTD

(Reg. no.: 196100107C)

Second Quarter Financial Statements Announcement

The figures have not been audited

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
					THE GROUP
			Quarter ended 30 June		6 months ended 30 June
		Note	2019	2018	Change	2019	2018	Change
			S$'000	S$'000	%		S$'000	S$'000	%
Continuing operations
Sales			59,706	69,536	(14)	119,670	154,515	(23)
Cost of sales		(54,557)	(64,921)	(16)		(110,330)	(142,731)	(23)
Gross profit	(2)	5,149	4,615	12	9,340	11,784	(21)
Other income
- Interest	(3)	1,312	1,040	26	2,745	2,174	26
- Others	(3)	4,062	2,866	42	4,723	5,454	(13)
Other gains and losses	(4)	369	1,071	(66)	237	(1,797)	n/m
Distribution costs	(5)	(2,259)	(2,517)	(10)	(4,752)	(5,180)	(8)
Administrative expenses	(6)	(8,931)	(7,705)	16	(16,854)	(15,323)	10
Impairment loss on financial assets	(6)	(626)	(476)	32	(443)	(447)	(1)
Finance costs	(7)	(291)	(8)	n/m	(523)	(47)	n/m
Share of results of associated companies, net of tax	(8)	(214)	(470)	(54)		(322)	(524)	(39)
Loss before income tax	(1)	(1,429)	(1,584)	(10)	(5,849)	(3,906)	50
Income tax expense	(9)	(385)	112	n/m		(200)	(588)	(66)
Loss from continuing operations		(1,814)	(1,472)	23	(6,049)	(4,494)	35
Discontinued operations
Profit / (Loss) from discontinued operations	(10)	17	(49)	n/m	338	(122)	n/m
Total loss for the financial period		(1,797)	(1,521)	18	(5,711)	(4,616)	24
(Loss) / profit attributable to equity holders of the
Company:
- from continuing operations		(1,404)	(1,541)	(9)	(5,179)	(4,610)	12
- from discontinued operations		20	(57)	n/m		396	(143)	n/m
			(1,384)	(1,598)	(9)	(4,783)	(4,753)	12
(Loss) / profit attributable to non-controlling interest:
- from continuing operations		(410)	69	n/m	(870)	116	n/m
- from discontinued operations		(3)	8	n/m		(58)	21	n/m
			(413)	77	-	(928)	137	-
Basic and fully diluted earnings per share (cents)
- from continuing operations		(0.38)	(0.41)	(7)		(1.39)	(1.23)	13
- from discontinued operations		0.01	(0.02)	n/m	0.11	(0.04)	n/m
n/m: not meaningful

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NSL LTD

(Reg. no.: 196100107C)

Notes to the Group's Income Statement

1. Loss before income tax from Continuing Operations is arrived at after crediting / (charging) the following items:

			THE GROUP
		Quarter ended		6 months ended
		30 June		30 June
	Note	2019	2018	2019	2018
		S$'000	S$'000		S$'000	S$'000
Dividend income	(i)	6	1,033	6	1,033
Interest income	(ii)	1,312	1,040	2,745	2,174
Insurance compensation	(iii)	3,300	-	3,300	1,500
Amortisation of intangible assets		(249)	(297)	(511)	(466)
Depreciation of property, plant and equipment		(3,290)	(3,329)	(6,685)	(6,528)
Depreciation of right-of-use assets	(iv)	(729)	-	(1,491)	-
Allowance for stocks obsolescence, net	(v)	(180)	-	(66)	(12)
Write down of inventories, net	(v)	(184)	-	(261)	-
Allowance of impairment for trade receivables, net	(vi)	(627)	(476)	(443)	(448)
Amortisation of deferred income		25	66	51	129

1. 1. Decrease in 1H-2019 and 2Q-2019 was due to lower dividend income recorded by the Company.
   2. Increase in 1H-2019 and 2Q-2019 was due to higher interest income recorded by the Company.
   3. Incurred by the Environmental Services division as a result of the fire incident in March 2017.
   4. Depreciation of right-of-use assets in relation to leases which had previously been classified as 'operating leases' with effect from 1 January 2019 arising from the Group's adoption of SFRS(I) 16 Leases.
   5. Mainly attributable to the precast operations in Malaysia and Dubai.
   6. Mainly attributable to the precast operations in Dubai.
2. Gross profit
   The decrease in gross profit for 1H-2019 was due mainly to lower sales and margin from the Precast operations in Dubai and the Environmental Services divisions. The increase in gross profit for 2Q- 2019 was due mainly to improvement in gross profit margin of the precast operations in Singapore and Malaysia.
3. Other income
   The increase in interest income for 1H-2019 and 2Q-2019 was due to higher interest income recorded by the Company. The decrease in other income for 1H-2019 was due mainly to lower dividend income recorded by the Company. The increase in other income for 2Q-2019 was due to recognition of business interruption insurance income of S$3.3 mil for losses incurred by Environmental Services division as a result of the fire incident in March 2017.

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NSL LTD

(Reg. no.: 196100107C)

Notes to the Group's Income Statement (continued)

(4)	Other gains and losses
			THE GROUP
		Quarter ended		6 months ended
		30 June		30 June
		2019	2018	2019	2018
		S$'000	S$'000		S$'000	S$'000
	Currency exchange (loss) / gain - net	(214)	100	(296)	(405)
	Insurance claim for damage of plant and equipment	-	800	-	800
	Property, plant and equipment
	- Gain / (Loss) on disposal including write-off, net	49	(250)	77	(391)
	- Impairment, net	-	(516)	-	(516)
	Loss on disposal of a subsidiary company	-	-	(37)	-
	Plant closure and restructuring costs	-	(321)	-	(2,171)
	Gain on disposal of an associated company	-	1,060	-	760
	Fair value gain on redemption liability	476	-	476	-
	Others	58	198		17	126
		369	1,071	237	(1,797)

1. Distribution costs
   The decrease in distribution costs for 2Q-2019 was attributable to the Environmental Services division, in line with lower sales.
2. Administrative expenses Impairment loss on financial assets
   The increase in administrative expenses for 1H-2019 and 2Q-2019 was attributable to increase in professional fees for the Environmental Services division and operating expenses incurred by the newly setup PBU operation in Malaysia. The increase in impairment loss on financial assets was attributable the allowance of impairment for trade receivables for the precast operations in Dubai.
3. Finance costs

		THE GROUP
	Quarter ended		6 months ended
	30 June		30 June
	2019	2018	2019	2018
	S$'000	S$'000		S$'000	S$'000
Interest expense on lease liabilities	(169)	-	(358)	-
Interest expense on bank loans	(122)	(8)		(165)	(47)
	(291)	(8)	(523)	(47)

The increase in finance costs for 1H-2019 and 2Q-2019 was mainly attributable to recognition of lease liabilities following the adoption of SFRS(I) 16 Leases and increase in average borrowings for the period.

3

NSL LTD

(Reg. no.: 196100107C)

Notes to the Group's Income Statement (continued)

1. Share of results of associated companies, net of tax
   The decrease in losses for 1H-2019 and 2Q-2019 was attributable to an associate in Malaysia.
2. Income tax expense

			THE GROUP
		Quarter ended		6 months ended
		30 June		30 June
	Note	2019	2018	2019	2018
		S$'000	S$'000		S$'000	S$'000
Taxation charge for the financial period comprises:
- Current period taxation	(i)	(387)	64	(235)	(602)
- Over-provision in respect of prior years	(ii)	2	48		35	14
		(385)	112		(200)	(588)

1. 1. The Group incurred a net tax charge in 1H-2019 and 2Q-2019 despite in a loss position due mainly to losses incurred by certain Group companies which could not be set off against the profits earned by other companies in the Group.
   2. Over-provisionin respect of prior years in 1H-2019 comprised mainly of reversal of deferred tax liabilities.
2. Profit / (loss) from discontinued operations
   An analysis of the results of discontinued operations is as follows:

		THE GROUP
	Quarter ended		6 months ended
	30 June			30 June
	2019	2018	2019	2018
	S$'000	S$'000		S$'000	S$'000
Sales	18,045	25,143	35,337	47,232
Net expenses	(17,995)	(25,181)		(34,934)	(47,364)
Profit / (loss) before tax from discontinued operations	50	(38)	403	(132)
Income tax expense	(33)	(11)		(65)	10
Profit / (loss) after tax from discontinued operations	17	(49)		338	(122)

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NSL LTD

(Reg. no.: 196100107C)

Notes to the Group's Income Statement (continued)

1. Profit / (loss) from discontinued operations (continued)

1. On 5 August 2019, the Company's wholly-owned subsidiary, NSL OilChem Waste Management Pte. Ltd. ("NSL OilChem") entered into a sale and purchase agreement for the proposed disposal of
   6,000,000 ordinary shares in the capital of NSL Fuel Management Services Pte. Ltd. ("NSL Fuel"), representing 82.75 per cent. of the issued share capital in NSL Fuel, to KHC Fuel Investment Pte. Ltd. (the "Purchaser").
   Following completion, NSL OilChem will cease to hold any interest in NSL Fuel and accordingly, NSL Fuel will cease to be a member of the group comprising the Company and its subsidiaries.
   NSL Fuel was a separate major line of business responsible for the distribution of oil products. In accordance with SFRS(I) 5 Non-currentAssets Held for Sale and Discontinued Operations, NSL Fuel was disclosed as a discontinued operation and the carrying value of assets and liabilities of NSL Fuel were classified as held for sale from 2Q-2019 and measured at the lower of carrying amount and fair value less costs to sell prior to their disposal.
2. The details of assets and liabilities of the disposal group classified as held for sale for the Group are as follows:

	THE GROUP
	30.06.19	31.12.18
	S$'000	S$'000
Assets
Inventories	1,846	-
Cash and cash equivalents	1,319	-
Receivables and prepayments	14,157	-
Property, plant and equipment	2,146	-
Intangible assets	269	-
Total assets	19,737	-
Liabilities
Trade and other payables	6,992	-
Other non-current liabilities	745	-
Deferred tax liabilities	79	-
Total liabilities	7,816	-

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