(Extracted from Annual Report 2016)DEAR SHAREHOLDERS,
Ntegrator International Ltd. ("Ntegrator" or the "Group") has had another year of positive developments in the financial year ended December 31, 2016 ("FY2016"), as the Group achieved yet another year of net profit, following the successful turnaround to profitability in the financial year ended December 31, 2015 ("FY2015"). The Group continued to focus on the Project Sales and Project Management and Maintenance Services Segments, which is aligned with Ntegrator's strategy to grow its core businesses in its key markets. Despite the evolving and volatile macroeconomic environment, Ntegrator's sound business strategy played a pivotal role in guiding the Group's business decisions, and enabled the Group to strengthen its order book.
The Group intends to build on its progress achieved in FY2016, which has strengthened Ntegrator's established position as a leading network specialist and systems integrator. The contract wins across Ntegrator's key markets further highlighted the Group's expertise and track record in the regional markets. We are pleased to present to you our annual report for FY2016, and highlight Ntegrator's key developments over the past year and our strategies for the coming year.
Looking Back in 2016
Despite the challenging business environment in 2016, the Group achieved a 29.8% growth in overall revenue, from S$51.5 million in FY2015 to S$66.9 million in FY2016. The Project Sales Segment remained a key growth driver for the Group, registering a 47.8% jump to S$47.6 million in FY2016, compared to S$32.2 million a year ago. This was mainly attributable to the completion of major projects in Vietnam and Singapore in the financial year. While revenue for the Group's Project Management and Maintenance Services Segment fell marginally by 0.2% to S$19.3 million, the Segment continued to provide the Group with a steady stream of recurring income.
Ntegrator's gross profit rose 7.1% to S$11.8 million, from S$11.0 million in FY2015, backed by the Group's higher revenue contribution. Gross profit from the Project Sales Segment increased 3.5% to S$3.7 million in FY2016, while gross profit from the Project Management and Maintenance Services Segment improved by 8.8% to S$8.1 million despite a decline in revenue for this Segment.
Backed by the Group's sound business strategy and committed team, Ntegrator registered a 40.7% growth in net profit for FY2016. Net profit for the Group rose to S$2.9 million, compared to S$2.0 million a year ago. The Group maintained a healthy balance sheet, with cash and cash equivalents of S$15.6 million, while total borrowings stood at S$15.5 million as at December 31, 2016. Shareholder's equity also improved from S$16.9 million to S$21.0 million as at December 31, 2016.
Moving into FY2017 and Beyond
Moving into 2017, the Group expects the business environment to remain challenging, driven by the changes in the geopolitical landscape as well as intensifying market competition. Ntegrator will remain aligned with its strategy to focus on its core businesses, which has proven successful in enabling the Group to achieve a stable performance amid market challenges. The Group will continue to leverage its strong relationships with existing customers, as well as seek opportunities to reach out to new customers, in order to grow our revenue and safeguard profitability.
In line with Ntegrator's business strategy, the Group will continue to ride on the developments in the information communications technologies and related infrastructure industry to identify new opportunities to strengthen our operations in Singapore, Vietnam and Myanmar. Ntegrator will continue to closely monitor industry developments and keep pace with the technological and regulatory changes in the sector. The Group will actively identify areas to strengthen our operational efficiency, thereby maximizing productivity and generating greater returns for the business.
The Group's strategy has delivered success in FY2016, with a strong order book of S$36.2 million as at December 31, 2016, and multiple contract wins from repeat customers. More notably, Ntegrator secured its single largest supply contract placed to-date by Viettel, worth approximately S$20.8 million. All these underscore the sound business strategy adopted by the Group, which has allowed Ntegrator to deliver consistent results. Moving forward, the Group continues to stay firm in its strategy and work hard towards becoming a leading provider of information technology and telecommunications solutions.
In closing, I would like to express my sincere appreciation to our valued shareholders for their continued trust and support towards Ntegrator. I would also like to thank our Board members, suppliers and customers who have played an integral role in supporting our business. Last but not least, I would like to express my heartfelt gratitude to the management team and staff for their dedication and valuable contribution to the Group. It is a privilege to work with such a dynamic and capable team and I am heartened to see the team's success in driving the Group's consistent performance and growth over the years. I look forward to your continued support as we work towards delivering sustainable returns for our shareholders.Han Meng Siew
31 March 2017