Financials

Full Year Financial Statement And Dividend Announcement 2009

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Fourth Quarter Financial Statement and Dividend Announcement

Income Statement

Balance Sheet

Review of Group Performance

(a) Revenue

The Group's revenue for the financial year ended 31 December 2009 (“FY 2009”) was $3.25b, representing year-on-year growth of 10.2% as compared to the financial year ended 31 December 2008 (“FY 2008”). This growth mainly came from the Distribution segment, which registered 14.1% growth, led by strong sales in notebooks and desktops, especially in Indonesia, Malaysia and China.

For 4Q 2009, the Group's revenue increased by 23.4% to $892.7m as compared to 4Q 2008 of $723.6m, with the Distribution segment driving this growth at 37.6%. The Enterprise Systems and Services segments also experienced moderate growth of 5.4% and 12.7% respectively in 4Q 2009 against the same period in 2008. In the Distribution segment, demand for notebooks, desktops and printers continued to strengthen, while in the Enterprise Systems and Services segment, there was more corporate spending seen over the last few quarters on networking and storage products as well as in services revenues.

Geographically, all countries registered growth year-on-year in the fourth quarter, with Indonesia and Malaysia driving this growth. For 4Q 2009, Indonesia and Malaysia registered year-on-year growth in revenues of 106.6% and 40.0% respectively.

(b) Profitability

The Group's net profit after tax and minority interests (“NPATMI”) for FY 2009 increased by 29.9% to $38.2m as compared to $29.4m for FY 2008. This was achieved on the back of stronger management of costs and working capital efficiency.

For the financial year ended 31 December 2009, gross profit improved by 6.1% year-on-year while costs was well managed at 1.3% year-on-year growth. Finance costs were 53.2% lower in FY 2009 at $5.3m, and the Group derives much higher contributions from its associate company in Philippines.

For the current quarter, the Group's NPATMI grew by 52.4% to $12.0m as compared to $7.9m over the same corresponding period in 2008.

Gross profits for 4Q 2009 were 25.4% higher than in 4Q 2008, which is in line with higher revenue growth. Gross margin for 4Q 2009 increased marginally to 5.3% from 5.2% in 4Q 2008 due to improved margins for both Distribution and Enterprise Systems in 4Q 2009.

Total operating expenses were 15.9% higher in 4Q 2009 as compared to 4Q 2008, mainly driven by higher sales incentives and warehousing expenses. Overall, total operating expenses as a percentage of revenue improved from 3.7% in 4Q 2008 to 3.5% in 4Q 2009 as a result of savings from improved operational efficiencies and the continued stringent management of operating costs.

Finance costs were 41.1% lower in 4Q 2009 vs 4Q 2008 as a result of reduced bank borrowings from improved working capital management in the current quarter. Gross bank borrowings fell by $18.1m to $175.1m as at 31 December 2009 from $193.2m as at 31 December 2008. 

(c) Statement of Financial Position

The Group's total shareholders funds were $259.5m as at 31 December 2009, an increase of $21.7m from $237.8m as compared to 31 December 2008. For the financial year ended 31 December 2009, the Group achieved a stronger positive operating cash flow of $29.5m as compared to a positive operating cash flow of $16.4m for FY 2008.

Group bank borrowings decreased by $18.1m to $175.1m as at 31 December 2009, from $193.2m as at 31 December 2008. Net gearing has also been reduced to 0.48 as at 31 December 2009 from 0.60 as at 31 December 2008.

Commentary

In view of the improving economic environment and positive outlook in the region, coupled with the improved operational efficiencies, tighter cost management and healthier working capital turns the Group has achieved in FY 2009, the Directors expect that the Group will continue to perform well in FY 2010.