CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directors of Sin Ghee Huat Corporation Ltd., I am pleased to inform our valued shareholders that the Group has achieved better results in tandem with improved market conditions. We have closed our financial year ended 30 June 2011 (FY2011) with a higher net profit of $5.3 million and a higher revenue of $52.7 million. The net profit and revenue achieved were 43% and 9% respectively higher than the previous year ended 30 June 2010 (FY2010).

Group earnings increased to 2.4 cents per share compared with the previous year’s 1.7 cents per share. Net asset value was 39.2 cents per share compared with 38.9 cents per share in FY2010.

The “trading & others” sector led revenue growth with a 26% increase, attaining $23.9 million in FY2011 versus $19.0 million in FY2010. The “machining & processing” sector, which encompasses the process industry and machine fabrication industry, contributed $12.1 million in revenue, equating to a 23% increase over the $9.8 million in the preceding year. However, revenue from the marine & shipbuilding sector and the building & construction sector declined.

The Group’s market mix in terms of geographical segment has remained largely unchanged. The local market in Singapore contributed 72% to the Group’s revenue. Exports to Malaysia, Indonesia and other ASEAN countries netted $12.8 million in revenue, representing 24% of the Group’s revenue. We are grateful to our valued customers who have given us their continued support for many years.

Our China subsidiary, SG Metals (Suzhou) Ltd, set up in Suzhou in The People’s Republic of China at the beginning of the financial year, commenced business operations during the first quarter of the year. This first overseas investment presents a new and exciting opportunity for the Group as we venture beyond our familiar homeland. This paves the way as we extend our reach cautiously but optimistically for a slice of the vast potential market in the PRC.

The Board recognises that the business climate in the years ahead will no longer be the same as it used to be in the last decade or so. Whilst the Singapore and regional economies have rebounded from the 2008 global recession, there are apparent signs that another global economic slowdown could be brewing on the horizon. The uncertainties cast by the debt crises in the United States and the Eurozone have posed challenges of varying degrees across the global economies. Amid this backdrop, the Group will stay vigilant as before and take the economic challenges in its stride.

We also recognise that to continue thriving in a fast changing globalised economy, maintaining status quo may no longer be the best option going forward. On the other hand, we must constantly be responsive to the external environments, and be adaptable to be able to stay competitive and relevant.

In this respect, the Group undertakes ongoing reviews of its business strategies. We keep an open mind on suitable opportunities that may arise, be it to augment the sustainability and growth of our core business, or to enhance the shareholder value in other viable businesses in the longer term perspectives

DIVIDENDS

The Board is pleased to recommend the payment of a Final dividend of 1.2 cents per share plus a Special dividend of 0.8 cents per share in respect of the financial year ended 30 June 2011. The dividends totalling $4,440,000, if approved at the forthcoming Annual General Meeting (AGM), will be paid on 15 November 2011.

DIVIDEND POLICY

For good corporate governance and to provide better clarity to shareholders, the Company would state its intended dividend policy. With effect from this financial year 2011, the Company intends to distribute approximately 50% of its net profits after tax as dividends, subject to factors such as our cash balance, projected capital expenditure requirements, investment plans and financial performance.

APPRECIATION

Mr Kua Chee Hong, Non-Executive Director of the Company, will not be seeking re-election as a Director of the Company at the forthcoming AGM. Mr Kua Chee Hong has been a Director of the Company since 11 July 1979. He relinquished his executive role in September 2006 but remained on the board as a Non-Executive Director. We thank Mr Kua Chee Hong for his contributions and support all these years and wish him well.

On behalf of the Board, I thank all our valued customers and business associates for their ongoing support. I also express my appreciation to my fellow Board members for their guidance, and to all staff and management of the Group for their hard work, dedication and commitment.

Goh Chee Wee
Chairman