LIEN HOE CORPORATION BERHAD
(Company No. 8507-X)
QUARTERLY REPORT ON CONSOLIDATED RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2008
THE FIGURES HAVE NOT BEEN AUDITED
CONDENSED CONSOLIDATED INCOME STATEMENTS
Individual Quarter Cumulative Quarter
Current Year Current Year
Year Corresponding Year Corresponding
Quarter Quarter Todate Period
30.9.2008 30.9.2007 30.9.2008 30.9.2007
RM'000 RM'000 RM'000 RM'000
Revenue 24,948 18,076 65,290 51,514
Operating and administration expenses (25,109) (16,018) (65,660) (47,179)
(Loss) / Profit from operations (161) 2,058 (370) 4,335
Other income - 3,178 - 3,178
Finance cost (1,251) (2,581) (3,514) (25,190)
Share of profit of associated company 192 - 634 -
(Loss) / Profit before tax (1,220) 2,655 (3,250) (17,677)
Tax 11 27 17 82
(Loss) / Profit for the period from continuing operations (1,209) 2,682 (3,233) (17,595)
Profit for the period from discontinued operations - 148 - 2,888
(Loss) / Profit for the period attributable (1,209) 2,830 (3,233) (14,707)
to equity holders of the parent
(Loss) / Profit per share (sen)
- basic, for (loss) / profit from continuing operations (0.33) 0.76 (0.89) (4.99)
- basic, for profit from discontinued operations - 0.04 - 0.82
(0.33) 0.80 (0.89) (4.17)
- diluted - - - -
(The condensed consolidated income statements should be read in conjunction with the Audited Financial Statements for the year
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ended 31 December 2007)
CONDENSED CONSOLIDATED BALANCE SHEET
As At As At
End Of Preceding
Quarter Year End
Property, plant and equipment 108,518 110,436
Land held for development 77,000 77,000
Investment property 8,019 7,788
Prepaid land lease payments 21,041 21,521
Goodwill on consolidation 4,328 4,328
Investment in associated company 18,379 17,368
Property development costs 11,478 11,257
Inventories 5,860 5,459
Amount due from customers for contract work 941 2,280
Receivables 22,419 22,386
Tax recoverable 1,570 1,793
Fixed deposits 1,500 354
Cash and bank balances 6,354 6,454
Non-current assets classified as held for sale - 1,100
TOTAL ASSETS 287,407 289,524
EQUITY AND LIABILITIES
Equity Attributable to Equity Holders of the Parent
Share capital 361,742 361,742
Reserves (184,929) (181,696)
Total equity 176,813 180,046
Deferred tax liabilities 22,981 23,072
Borrowings 35,008 412
Amount due to customers for contract work 3,530 3,417
Payables 31,711 30,403
Tax payable 71 49
Borrowings 16,186 40,406
Bank overdrafts 1,107 11,719
Total liabilities 110,594 109,478
TOTAL EQUITY AND LIABILITIES 287,407 289,524
Net assets per share (sen) 49 50
(The condensed consolidated balance sheet should be read in conjunction with the Audited Financial Statements for the year
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ended 31 December 2007)
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
Loss before tax from:
Continuining operations (3,250) (17,677)
Discontinued operations - 2,888
Adjustments for :
Non-cash items 1,809 5,460
Non-operating items (financing) 3,514 22,057
Profit before working capital changes 2,073 12,728
Changes in working capital
Net change in current assets 566 (6,108)
Net change in current liabilities 1,009 (11,288)
Taxes paid - (1,892)
Net cashflow from operating activities 3,648 (6,560)
Purchase of property plant and equipment (174) (1,033)
Proceeds from disposal of subsidiaries - 201,453
Proceeds from disposal of property plant and equipment 1,500 77,877
Investment in an associate (377) (14,898)
Net cash used in investing activities 949 263,399
Borrowings 7,061 (243,331)
Fixed deposits (1,146) -
Net cash from financing activities 5,915 (243,331)
Net change in cash and cash equivalents 10,512 13,508
Cash and cash equivalents at beginning of period (5,265) (4,544)
Cash and cash equivalents at end of period 5,247 8,964
Cash and cash equivalents comprise :-
Cash and bank balances 6,354 20,270
Bank overdrafts (1,107) (11,306)
(The condensed consolidated cash flow statements should be read in conjunction with the Audited Financial Statements for the
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year ended 31 December 2007)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
distributable Distributable Accumulated
Share capital reserves reserves losses Total
RM'000 RM'000 RM'000 RM'000 RM'000
At 1 January 2007 334,132 54,612 17,839 (219,376) 187,207
Movements during the period 27,610 61 - (14,707) 12,964
At 30 September 2007 361,742 54,673 17,839 (234,083) 200,171
At 1 January 2008 361,742 54,692 17,839 (254,227) 180,046
Movements during the period - - - (3,233) (3,233)
At 30 September 2008 361,742 54,692 17,839 (257,460) 176,813
(The condensed consolidated statement of changes in equity should be read in conjunction with the Audited Financial Statements
for the year ended 31 December 2007)
NOTES TO THE INTERIM FINANCIAL REPORT
1.) Basis of Preparation
The interim financial statements have been prepared in accordance with the requirements of FRS 134 : Interim Financial
Reporting and paragraph 9.22 of the Listing Requirements of Bursa Malaysia Securities Berhad, and should be read in
conjunction with the Group's audited financial statements for the year ended 31 December 2007.
The explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are
significant to an understanding of the changes in the financial position and performance of the Group since the financial year
ended 31 December 2007.
The accounting policies and methods of computation used in the preparation of the interim financial statements are consistent with
those adopted in the audited financial statements for the year ended 31 December 2007 except for the adoption of the
new/revised and amendment to Financial Reporting Standards effective for financial periods beginning on or after 1 July 2007.
The adoption of these Standard do not have significant impact to the Group.
2.) Auditors' Report
The auditors' report of the Group's annual financial statements for the year ended 31 December 2007 contains the following
"In the previous financial year, investment property ("The Atria Shopping Centre") with a carrying amount of RM91,666,000 was
classified as held for sale. An impairment loss of RM16,666,000 being the difference between the carrying amount and the fair
value less cost to sell of the investment property was not recognised in the income statement in the prior year of the Group. This
treatment by the management was not in accordance with the requirements of applicable Financial Reporting Standards in
Malaysia and caused us to qualify our audit opinion on the financial statements relating to that year. A loss of RM16,666,000
arising from the disposal, which was completed during the current year, was recognised in the current year. Had the impairment
loss of RM16,666,000 been recognised in the prior year, the Group's loss for the prior year and the Group's opening accumulated
losses for the year would have increased by RM16,666,000, whilst the Group's loss for the current year would have decreased by
the same amount"
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3.) Seasonal or Cyclical Factors
The Group's performance was not affected by any seasonal or cyclical factors.
4.) Unusual Items Affecting Assets, Liabilities, Equity, Net Income or Cash Flows
During the current financial quarter, there were no unusual items affecting assets, liabilities, equity, net income or cash flows of
5.) Changes In Estimates
There were no material changes in the estimates used for the preparation of the interim financial statements.
6.) Debts and Equity Securities
There were no issuance, cancellation, repurchase, resale and repayment of debt and equity securities in the current financial
7.) Dividends Paid
There were no payment of dividends in the current financial quarter.
8.) Segment Information
The key information of the Group's business by segment are tabulated below:-
Property Property Hotel
investment development Construction operation Others Total
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Revenue 3,241 - 43,827 18,222 - 65,290
Segment result (6,275) (148) 510 5,522 (135) (526)
Share of profit of associate 634 - - - - 634
Finance cost (3,514)
Interest income 156
Loss before tax (3,250)
Loss after tax (3,233)
No information is prepared on the geographical segments as the Group principally operates within Malaysia.
9.) Valuation of Property, Plant and Equipment
The values of property plant and equipment have been brought forward without amendment from the previous annual financial
10.) Material Events Subsequent to the End of the Interim Period
There were no material events subsequent to the end of the current financial quarter to the date of this announcement.
11.) Changes in the Composition of the Group
There were no changes in the composition of the Group in the current financial quarter.
12.) Contingent Liabilities / Assets
The Group's contingent liabilities as at 30 September 2008 are as follows:-
(a) Corporate guarantee issued in respect of banking facilities granted to a former subsidiary amounting to RM3.33 million; and
(b) Claims by third parties for the supply of goods and other charges amounting to RM0.92 million
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ADDITIONAL INFORMATION REQUIRED
BY THE BURSA MALAYSIA SECURITIES BERHAD'S LISTING REQUIREMENTS
I.) Review of Performance
In the current quarter, the Group generated total revenue of RM24.95 million as compared to RM19.12 million in the corresponding
quarter last year, whilst loss before tax for the current quarter is RM1.22 million as compared to a profit before tax of RM2.80 million in
the corresponding quarter last year.
The increase in revenue for the current quarter is contributed mainly by the higher amount of construction works completed. However
the higher revenue does not give rise to any improvement in earnings due to diminishing profit margin as a consequence of rising cost
II.) Review of Current Quarter's Results Against Immediate Preceding Quarter
The Group recorded a higher revenue of RM24.95 million in the current quarter as opposed to RM22.57 million in the immediate
preceding quarter. The higher revenue is mainly attributable to the increase in works done by the construction business.
The Group's loss before tax of RM1.22 million in the current quarter is higher than that recorded in the immediate preceding quarter of
RM0.67 million due principally to the write-back of debts in the preceding quarter.
The Group's business and earnings for the remaining period of this financial year are likely to be affected by the slowdown in the
economy. Necessary measures will be taken by the Board of Directors of the Company to mitigate the impact of the economy
slowdown on the Group's financial conditions and operating results.
IV.) Profit Forecast or Profit Guarantee
There were no profit forecast or profit guarantee given for this financial year ending 31 December 2008.
Taxation relates to transfer from the deferred tax account and underprovision in prior years.
VI.) Profit/Loss on Sale of Unquoted Investments and / or Properties
During the current financial quarter, there were no sale of unquoted investments and / or properties.
VII.) Purchase / Disposal of Quoted Securities
During the current financial quarter, the Company purchased a total of 937,400 ordinary shares representing 0.68% of the issued
and paid-up capital of Perduren (M) Berhad for a total consideration of RM377,321.
VIII.) Corporate Proposals
a.) On 13 April 2006, a wholly owned subsidiary, Russella Teguh Sdn Bhd ('RTSB') entered into a joint venture development
agreement ('JVDA') with Stellar View Development Sdn Bhd for the purpose of carrying out a joint venture commercial
development on RTSB's land. The gross development value for the intended development is estimated at RM280 million.
The JVDA continues to operate and be valid and binding upon the parties thereto pending the completion of the sale and
purchase agreement as referred to in Note VIII (b) below.
b.) On 7 May 2008, the Company entered into a sale and purchase agreement with The Atmosphere Sdn Bhd (formerly known
as Stellar View Development Sdn Bhd) for the disposal of the entire issued and paid-up capital of Russella Teguh Sdn Bhd
for a cash consideration of RM61 million.
This transaction is pending completion.
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IX.) Group Borrowings / Debt Securities
Group borrowings / debt securities as at 30 September 2008 are as follows :
Short term Long term
- bank overdrafts 1,107
- bankers' acceptances 4,856
- term loans 11,046 34,807
- hire purchase 284 201
X.) Off Balance Sheet Financial Instruments
There were no off balance sheet financial instruments for the current financial quarter.
XI.) Material Litigation
a.) On 26 May 2005 and 31 May 2005, the Company was served with writs of summons by two financial institutions for a sum of
RM3.33 million and RM2.52 million respectively pursuant to corporate guarantees issued in respect of banking facilities
granted to former subsidiaries.
These cases are pending trial.
b.) On 19 November 2002, the Company was served with a writ of summons by two third parties claiming the refund of the sum of
RM5.00 million which was paid in relation to the sale and purchase agreement entered into between them and the Company
on 3 March 1997. The said sale and purchase agreement had since lapsed due to non-fulfillment of the terms therein by the
The Board of Directors of the Company is of the opinion that there is no valid basis for this claim and has filed defence and
counterclaim against these parties.
The Company had instituted a claim against a third party of an amount of RM6.92 million being the balance
On 27 December 2001, the Company was served a writ for summons by the trustee for the holders of the
The Board of Directors did not recommend or paid any dividend for the current financial quarter.
XIII.) Loss Per Share
The calculation of loss per share is based on loss for the period attributable to equity holders of the parent and the weighted
average number of shares in issue during the period of 361,742,000 (2007 : 352,490,000).
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