Megachem Limited Annual Report 2015 32 Operating and Financial Review 1.2 Gross profit 1.3 Other operating income H2 2015 vs H1 2015 H2 2015 vs H2 2014 Gross profit margin for H2 2015 jumped to 23.7% as compared to 22.2% in H1 2015 mainly due to a larger proportion of sales contributed from ASEAN and better gross profit margin across several markets such as ASEAN, Middle East and South Asia. However, the higher gross profit margin was inadequate to compensate for the drop in gross profit that resulted from the decline in sales in H2 2015 of S$4.6 million, which caused a marginal decrease in gross profit by S$0.2 million or 1.7% as compared to H1 2015. Vis-à-vis H2 2014, gross profit margin was 3.0%-point higher due to same reasons noted above plus a lower write off of inventory in H2 2015. As a result, gross profit for H2 2015 was marginally higher by S$0.1 million despite S$7.3 million decline in sales. FY 2015 vs FY 2014 Year-on-year, gross profit margin improved by 2.7% point to 22.9% mainly due to better gross profit margin across ASEAN, America and Middle East markets and a lower write off of inventory in FY 2015. We achieved higher gross profit of S$25.4 million, which represented an increase of S$1.9 million or 8.2% as compared to the previous year despite recording a fall in sales in FY 2015. H2 2015 S$’000 H1 2015 S$’000 H2 2014 S$’000 S$’000 % S$’000 % Bad debt recovered 19 51 12 (32) (62.3) 7 57.9 Change in fair value of financial assets held for trading - forward foreign exchange contracts (43) 76 47 (119) (157.5) (90) (192.4) - listed equity security 10 - 55 10 100.0 (45) (81.8) Grant income 59 33 - 25 75.9 59 100.0 Net foreign exchange gain - - 190 - - (190) (100.0) Variance Fav(Unfav) H2 2015 VS H1 2015 Variance Fav(Unfav) H2 2015 VS H2 2014
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