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The Group incurred a loss of US$0.169 million in the first quarter ended 30 September 2017 ("1Q1718") as compared to a profit after income tax of US$6,000 in the quarter ended 30 September 2016 ("1Q1617"). The decrease was mainly driven by US$1.382 million decrease in revenue which was partially offset by US$0.494 million decrease in operating expenses and US$0.395 million decrease in administrative expenses and US$0.275 million decrease in its share of associates' losses.
The Group's revenue decreased 27.1% from US$5.092 million in 1Q1617 to US$3.71 million in 1Q1718 despite higher vessel utilization rate of 79% in 1Q1718 as compared to 77% in 1Q1617. The lower revenue was mainly driven by a significant decrease in market charter rate.
1Q1718 Operating expenses decreased 29.9%, in line with the 27.1% decrease in revenue. Gross profit before depreciation was 68.5% in 1Q1718 and 67.5% in 1Q1617.
Gross profit margins after direct depreciation was 19.2% in 1Q1718, representing a 59.8% decrease compared to the 32.2% achieved in 1Q1617.
Administrative expenses decreased 34.2% to US$0.76 million in 1Q1718 from US$1.155 million in 1Q1617 mainly due to the reversal of one-time business development cost of US$0.2 million in 1Q1718 and the impact of the costs restructuring exercise done previously.
The Group's share of associates' loss narrowed US$0.275 million from US$0.354 million in 1Q1617 to US$0.079 million in 1Q1718 mainly due to effective operating costs management. Operating cost decreased from US$0.582 million in 1Q1617 to US$0.269 million in 1Q1718.
The Group net assets value was US$121.05 million and net asset value per share was 17.17 US cents per share as at 30 September 2017. Current ratio was 2.47 as at 30 September 17, compared to current ratio of 2.33 as at 30 June 17.
Cash and cash equivalents increased by US$0.976 million or 20.9% to US$5.644 million as at 30 September 2017 compared to 30 June 2017. The increase was mainly due to the generation of positive operating cash flow of US$1.098 million and incurrence of minimal capital expenditure in 1Q1718.
Trade and other receivables increased by US$0.836 million or 4.6% to US$18.984 million as at 30 September 2017 as compared to 30 June 2017. US$1.47 million increase was due to payment delay from Group's customers & US$0.661 million increase was due to non-payment from the Group's related parties and holding company. The increase was partially offset by the decrease in the amount due from associates by US$1.295 million.
A client paid the Group one-year charter revenue in advance at the beginning of 2016. Advance from Client decreased US$1.134 million in line with the charter services provided in 1Q1718.
The unrecognised revenue balance arised from the Group ceasing revenue recognition from a charterer who has defaulted on their payments. Legal actions has been taken against the client.
In May 2017, OPEC and non-OPEC members agreed to a further nine-month extension of production cuts to first quarter of 2018. The compliance with the agreed production cuts and improved world economy has supported oil prices between US$45 – US$50 per barrel. However, operating conditions are expected to remain challenging over the next 12 months. The Group will continue to develop ways to increase operational efficiency, cut costs and preserve cash that will allow us to ride out the rest of the downturn and be ready for the rebound in the industry.
Save as disclosed herein, there are no known factors or events which may affect the Group in the next reporting period and the next 12 months.