For FY2013, the Group posted an exemplary set of results underpinned by stronger operating performances of our corrosion prevention ("CP") and refined petroleum ("RP") businesses.
Net profit attributable to equityholders in FY2013 soared 54% to S$8.0 million. Excluding non-recurring expenses that were related to acquisition and corporate activities, the Group would have reported a net profit of S$10.1 million in FY2013, up 91% from FY2012.
The growth in net profit in FY2013 was driven by increases in our Group revenue and gross profit, coupled with higher other income. Group revenue in FY2013 increased 13% to S$290.4 million as both the CP and RP businesses achieved double-digit expansion in sales. As a percentage of Group revenue, RP business accounted for 85% while CP segment contributed 14% in FY2013.
Despite the competitive business environment, the Group's gross profit rose at a faster pace of 18% to S$44.6 million which led to a wider gross profit margin of 15.4% from 14.7% previously. This was attributed primarily to the higher GP margin of our RP segment.
Our total operating expenses (selling and distribution, administrative and other operating expenses) in FY2013 amounted to S$35.4 million, up 14% from S$30.9 million in FY2012.
Our selling and distribution expenses in FY2013 rose in tandem with higher business volume. Administrative expenses were also higher in line with the increase in staff related expenses and workers' levy, and general business expenses. In addition, the Group also incurred legal and professional expenses relating to corporate activities, and consolidated the administrative expenses of a newly acquired subsidiary under the RP business. The acquisition of Hetat resulted in corporate expenses of S$1.9 million which contributed to the increase in other operating expenses during FY2013.
As a result of the above factors, the Group's net profit improved to S$8.0 million, an increase of 52% from S$5.2 million in FY2012. Net operating profits of the CP and RP businesses totalled S$10.2 million in FY2013, an increase of 82% from the previous year. However, the improvement in business operations was partially undermined by head office expenses of S$0.6 million and non-recurring expenses in relation to corporate activities of S$2.1 million in FY2013.
The Group remained in a sound financial position as at 31 December 2013. Cash and cash equivalents increased to S$51.5 million, while net gearing stood at 0.3 times at the end of December 2013. Shareholders' equity increased to S$91.8 million (21.79 cents per share) as at 31 December 2013 from S$85.6 million (20.03 cents per share) as at 31 December 2012. This was attributed mainly to higher revenue reserve which was offset partially by a dividend payment of S$2.1 million in respect of FY2012.
The RP business demonstrated healthy revenue growth of 13% to S$247.1 million in FY2013. Total sales volume grew 21%, which was partially undermined by lower average selling prices compared to a year ago. Revenue in FY2013 also reflected maiden contribution from the new blending and trading business that was initiated in November 2013 by the new management of our RP business.
The key driver of RP segment's sales performance in FY2013 was the distribution of Industrial and Wholesale products which chalked up an increase in sales of 24%. By intensifying our sales efforts, we capitalised on the firm demand for Industrial and Wholesale products which was driven by the ongoing industrial, marine, service, infrastructure and construction activities in Singapore. In addition, our Industrial and Wholesale product category also benefited from incremental revenue from a new product (asphalt) which commenced sales in March 2012, and a full-year contribution from a new subsidiary (Axxmo International) that was acquired by See Hup Seng in December 2012. As a result, the distribution of Industrial and Wholesale products accounted for 52% of RP segment's revenue in FY2013, up from 48% in FY2012.
Sales of Petroleum-intermediates (which are generally used as feedstock in manufacturing processes) edged up 5% in FY2013. This was in tandem with the gradual recovery in demand from end-users and resellers in Asia Pacific. The level of industrial activities in the region was generally on the mend, albeit uneven as manufacturers' export volumes hinge on the state of the Eurozone and USA economies. In FY2013, Petroleum-intermediates contributed to 48% of RP segment's revenue.
RP business generated higher gross profit of S$31.1 million in FY2013, up 19% from a year ago. This translated into higher gross profit margin of 12.6% compared to 12.0% previously. Despite lower average selling prices, we saw better profit margins for certain products which benefited from lower cost of inventory replenishment, and also recorded maiden gross contribution from the new blending and trading business.
WIth higher revenue and gross profit, RP business net operating profit more than doubled to S$5.5 million from S$2.6 million in FY2012.
Our CP business also made a respectable recovery in FY2013. Revenue climbed 19% to S$42.1 million, thanks to a broad-based increase across the various business units – Plant Operations, Site Blasting and Tank Coating, and Trading.
Our Plant Operations demonstrated another year of positive growth in FY2013 with sales increasing 12% from a year before to remain as the largest unit with a contribution of 44% to CP segment's revenue. The Plant Operations witnessed higher business volume from the marine, oil and gas, infrastructure and construction sectors in FY2013. The Trading unit also saw an increase in sales as a result of revenue recognition of a turnkey project. Although the operating environment for our Site Blasting and Tank Coating unit is tougher due to competition from alternative corrosion prevention services and shortage of foreign workers, this unit turned in slightly higher sales in FY2013 on a recovery in orders during the second half of the year.
Gross profit in FY2013 increased in tandem with sales by 17% to S$13.1 million. The CP business maintained its gross profit margin at 31.2% compared to 31.8% in the previous year despite the lower-margin turnkey project under the Trading unit. The steady gross profit margin was shored up by the Plant Operations unit which delivered higher gross profit margin on increased capacity utilisation, better product mix and improved cost efficiencies.
Thanks to the higher volume of business and its consistent focus on maintaining cost-efficient operations, the CP business saw its net operating profit surge by 61% to S$4.7 million in FY2013 from S$3.0 million in FY2012.