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The operating environment remained challenging in 2017 due to uncertainties in the global economy. Many customers in the network and communications space delayed spending for infrastructure projects, which contributed to the slowdown in demand worldwide, and subsequently intensified competition in the sector.

The difficult operating conditions were exacerbated when the Group had to deal with technical issues in Vietnam, which hindered the signing of new contracts by our customers in the country. As a result, the Group posted a 50.5% decline in revenue to S$33.1 million, which also contributed to the net loss of S$2.0 million incurred in FY2017.

The technical glitch we faced in Vietnam was from a single manufacturer and for a period of about six months. We worked with the customer and the manufacturer to determine the source and circumstances surrounding the technical glitch, and also checked on the warranty coverage of the equipment in question. During this period of time, the Group's Vietnamese customer declined approval of any new contracts until the issues were resolved. The issues have now been resolved with the replacement of the aff ected equipment by the manufacturer, which are covered under warranty. More importantly, we have started to present sales proposals to our Vietnamese customer.

As a testament to the entrenched relationships we have established with our customers, the Group continued to secure repeat orders from them. At the outset of the financial year under review, we secured two major contracts worth a total value of S$47.8 million from a regional service provider and another Singapore based customer. Under the contracts, Ntegrator will provide fibre installation and maintenance services to these repeat customers.

Over in Myanmar, the Group continued our marketing efforts to expand our customer base and revenue streams. Although we did not secure any new contracts in FY2017, our efforts paid off when we were awarded a US$2.0 million (approximately S$2.7 million1) contract subsequent to the financial year end. Ntegrator will supply spare parts and ECI equipment to the Ministry of Defence which is completed in March 2018.

Additionally, the Group clinched three other projects in Singapore after FY2017. Under one of the three contracts, the Group will provide services in relation to a broadband fiber network. These services include installation, patching and re-instatement works, which commenced in January 2018, covering a contract period of three years.

The remaining two contracts from a regional service provider include a project to provide fiber works, while the other is an addition to an existing contract to supply pipeline and manhole works.

The above-mentioned three contracts are expected to contribute positively to the Group's financial performance over the next three financial years, subject to timely completion of the projects and eff ective cost management.

Excluding the four contract wins secured in February 2018, the Group's outstanding order book stood at S$75.5 million as at December 31, 2017, compared to S$36.2 million as at end of 2016. The rise in order book was largely due to repeat orders from Singapore. The Group expects a significant portion of the order book to be completed and contribute to Ntegrator's financial performance in the financial year ending December 31, 2018.

Moving forward, we will continue to leverage on our trusted brand name, proven track record and established relationships with customers to capture growth opportunities in our targeted markets of Singapore, Myanmar and Vietnam.

  1. Based on exchange rate of USD$1.00 : S$1.31