Skip Navigation

Email This Print This Quarterly Results

Click here to download the complete financials

Financial Statements And Related Announcement For the 3 months ended 31 March 2018

Income Statement

Statement of Comprehensive Income for the three months ended 31 March 2018:

A statement of financial position

Review of Performance


In line with management’s commentary in Section 10 of the Group’s last results announcement, Group Revenue for 1Q2018 was 43.3% lower compared to the same period last year, primarily due to minimal export to China as the Group commenced its conversion from the Export segment to the new China Wholesale segment.

Quarter-on-quarter, Gross Profit margin remains stable at 69.3% while Net Profit Margin improved to 22.8% in 1Q2018. This was mainly due to the following factors:

  • Other Operating Income which the Group charges its China Agent for market support activities, product trainings and IT services as a function of the Agent’s sales for the 1Q2018, increased by 165.7% to $3.9 million;
  • In line with revenue decrease in 1Q2018, Distribution Costs which comprises freelance commissions, annual convention expenses and other sales related costs decreased by 32.1%;
  • Administrative Expenses for the Group decreased from $8.9 million in 1Q2017 to $6.6 million in 1Q2018 as a result of lower professional fees, management and staff costs as well as lower amortisation expenses;
  • Net Other Losses of $0.2 million in 1Q2018 was mainly attributable to Unrealised Foreign Exchange Losses recorded during the period due to revaluation of the Group’s financial assets denominated in US Dollars from a depreciating USD as well as Unrealised Foreign Exchange losses recorded by our Indonesia Subsidiary as Indonesia Rupiah weakened against the Singapore Dollar and offsetting the reversal of unaccounted cash written off previously announced in February 2015, concerning BWL Health & Sciences Inc. of $0.7 million. The amount was in respect of tax payments for which had been finalised and paid;
  • The Group’s Income Tax Expenses decreased from $2.5 million in 1Q2017 to $1.4 million in 1Q2018 due to a decrease in Profit Before Tax recorded by the Group.

As a result, Profit Attributable to Owners of the Parent Company declined 40.3% from $9.6 million in 1Q2017 to $5.7 million in 1Q2018.

Revenue by Business Segments

For Quarter: 1Q2018 Vs 1Q2017

For 1Q2018, revenue from the Group’s business of Direct Selling declined by 28.6% due to decline in revenue from Taiwan offsetting improvements from Singapore, Indonesia and Hong Kong.

In line with the last results announcement, the Group took its first step in converting the Export segment into the new segment of China Wholesale in 1Q2018. During the transition, some stock keeping units (SKU) of the Group’s brands were imported into China with the Group’s subsidiary Best World (China) Pharmaceutical (BWCP), replacing the previous agent as the new sole importing agent. As these exports are through the Group’s subsidiary BWCP, no export revenue or profit can be recognized until such point that the products are sold to BWL Experience Centres.

Taking the above into consideration and because the Export Agent had already received their inventory for 1H2018 in 4Q2017, technically, no Export should be required for 1Q2018. However, due to strong market demand in 1Q2018 resulting in stock shortages for some SKUs on the Agent’s side, $8.0 million of Export were still required in 1Q2018.

Compared with 1Q2017, Manufacturing/Wholesale segment decreased marginally by $0.06 million. Management will continue its marketing effort in this segment to increase wholesalers’ demand for the Aurigen line of health supplements in its China drugstore wholesale business.

As at 31 March 2018, total membership for the Group’s Direct Selling business increased 2.1% to 500,259 members as compared to 31 December 2017. Active distributors, which refers to members who have received commission over the last 12 months stands at 9.8% of total membership.

Revenue by Geographical Locations

For Quarter: 1Q2018 Vs 1Q2017


Singapore continued its momentum from FY2017 showing an improvement of 8.0% in 1Q2018. This is mainly attributable to a successful campaign in developing new distributors.


As explained above, as a result of delayed revenue recognition, revenue from China declined 68.2% in 1Q2018 vis-à-vis the same period last year as the Group entered into a transition for the conversion of the Export segment into the new segment of China Wholesale.

The management wishes to highlight that the declined revenue in 1Q2018 does not reflect actual demand for the Group’s product offerings in the market, which on the contrary continued to show positive growth in 1Q2018. Such demand is currently being fulfilled directly by our Export Agent’s inventory on hand.


Revenue from Taiwan declined by 35.3% when compared to 1Q2017 as a result of lower retention rate of members and reduction in price promotional activities of core products.


The Group’s Indonesia market improved by 104.9% in 1Q2018 mainly due to increased demand from our weight management line, continued marketing efforts to increase demand for our skin care line and also continued effort to train new distributors in preparation for the next wave of future leaders.


Sales in Other Markets increased by 26.8 % from $1.9 million in 1Q2017 to $2.4 million in 1Q2018, primarily due to improved sales from Hong Kong, Myanmar and Vietnam offsetting declines in the markets of Thailand, Korea, Philippines and Malaysia.

Financial Position and Cash Flow

Non-current assets of the Group decreased from $23.8 million as at 31 December 2017 to $22.8 million as at 31 March 2018, mainly due to depreciation of Property, Plant and Equipment and amortisation of Intangible Assets.

Inventories increased slightly from $28.2 million as at 31 December 2017 to $29.6 million as at 31 March 2018 as the Group is currently operating at a sufficient inventory level to sustain growth moving forward.

During this transition phase, Trade and Other Receivables decreased from $47.1 million as at 31 December 2017 to $28.4 million as at 31 March 2018 as a result of payments received from Export Agent as well as lower export sales during the quarter.

Other Assets increased from $4.3 million as at 31 December 2017 to $8.7 million as at 31 March 2018 mainly due to the higher deposits paid to suppliers for orders of inventory.

Trade and Other Payables decreased from $45.9 million as at 31 December 2017 to $43.9 million as at 31 March 2018 due to lower accruals of freelance commissions.

Total Other Financial Liabilities decreased from $7.4 million as at 31 December 2017 to $4.1 million as at 31 March 2018 due to repayment of bank borrowings during the quarter.

Other Liabilities were maintained at $1.0 million as at 31 March 2018 vis-à-vis 31 December 2017.

Income Tax Payable increased from $10.8 million as at 31 December 2017 to $12.0 million as at 31 March 2018 due to tax provisions for certain profitable companies within the Group.

As at 31 March 2018, the Group generated net cash flow from operating activities of $20.4 million mainly due to payments received from Export Agent. Net cash flow used in financing activities of $3.4 million was mainly due to repayment of bank borrowings during the quarter.

As at 31 March 2018, the Group maintained a healthy balance sheet and working capital position with approximately $99.0 million in cash and cash equivalents.


Although the Group’s top and bottom line has been impacted in 1Q2018 due to the conversion of its business model from Export to China Wholesale and since actual demand for the Group’s brand offerings in China is still growing, barring any unforeseen circumstances, management is cautiously optimistic that the China Wholesale segment will contribute to the growth in the bottom line for the Group in 2H2018.

Factors that may affect the Group’s performance in the next reporting period and for the next 12 months are as follows:

  • To set the Group’s growth path moving forward, management constantly explores M&A opportunities. In the course of assessing these opportunities, regardless of success or not, professional fees and other related expenses may be incurred;
  • Higher Administrative expenses for FY2018 compared to FY2017 due to an increase in management and staff in certain Regional Centres (RCs), depreciation expenses related to the Group’s Tuas facility and machineries/equipment for the factory and establishment of our Changsha RC;
  • As strategies implemented are not expected to gain traction immediately, management is cautiously optimistic that revenue from Taiwan will be stable when compared to FY2017, primarily led by events, campaigns and product launches in 2H2018.
  • The conversion of Export to the new China Wholesale segment is expected to extend into 2Q2018 as export agent continues to deplete its inventory. Revenue from the Export Segment in 2Q2018 is also expected to be lower than that of 2Q2017. The Group’s China subsidiary BWCP may be able to register its first revenue contribution for the China Wholesale segment in 2H2018;
  • Upon conversion to China Wholesale, some or all of the following items, amongst others may be affected:
    1. Increase in Revenue and Gross Profit as a result of revenue recognition at a price higher than export price;
    2. Increase in Administrative Expenses due to management and staff costs as well as lease expenses of our new Changsha RC; and
    3. Decline in Other Operating Income due to lower service fees charged to the Group’s Export Agent, and

  • Fluctuating currencies of key markets which the Group operates in against the SGD may positively or negatively impact the Group’s performance. Management will undertake measures to mitigate any potential risks the Group is exposed to.

Other ongoing factors that affect the Group’s performance include, timeline required for product registration in various markets, natural disasters, local direct selling regulations, product regulations and market competition.

Click here to download the complete financials