Davis modities (US:DTCK)2025-12-23 18:28Financial Performance - Revenues for the six-month period ended June 30, 2025, increased to $95,036,000, representing a 42.5% growth compared to $66,876,000 in the same period of 2024[17] - Net income for the six-month period ended June 30, 2025, decreased to $41,000, down from $1,334,000 in 2024, reflecting a significant decline of 96.9%[17] - The company reported a gross profit of $2,630,000 for the six-month period ended June 30, 2025, down from $2,917,000 in 2024, a decrease of 9.8%[17] - The company’s income before tax expenses significantly decreased from $1,625,000 in June 2024 to $41,000 in June 2025[123] Assets and Liabilities - Total current assets as of June 30, 2025, rose to $33,272,000, a substantial increase of 172.5% from $12,210,000 as of December 31, 2024[15] - Total liabilities increased to $33,789,000 as of June 30, 2025, compared to $12,961,000 as of December 31, 2024, marking a 160.1% rise[15] - The company’s total assets reached $40,550,000 as of June 30, 2025, compared to $19,688,000 as of December 31, 2024, an increase of 105.5%[15] - The company had total finance lease liabilities of $95,000 as of June 30, 2025, down from $101,000 at the end of 2024[103] - Bank loans increased from $322,000 as of December 31, 2024, to $3,854,000 as of June 30, 2025, primarily due to the utilization of trade financing facilities[104] Cash and Cash Equivalents - Cash and cash equivalents at the end of the period were $1,661,000, up from $678,000 at the beginning of the period, indicating a growth of 145.5%[24] - As of June 30, 2025, the company had cash balances exceeding government insured limits in Singapore by approximately S$1,816,911 (approximately US$1,410,287)[58] Accounts Receivable and Inventory - Accounts receivable increased significantly to $27,270,000 as of June 30, 2025, from $7,692,000 as of December 31, 2024, representing a growth of 254.5%[15] - Total inventory decreased from $319,000 as of December 31, 2024, to $123,000 as of June 30, 2025, suggesting improved inventory management[93] - The allowance for credit loss rose from $150,000 at the beginning of 2025 to $390,000 by June 30, 2025, indicating increased risk in receivables[91] Operating Expenses - Operating expenses for the six-month period ended June 30, 2025, increased to $2,818,000, compared to $1,785,000 in 2024, reflecting a rise of 57.9%[17] - The company’s accrued operating expenses decreased from $1,145,000 in December 2024 to $898,000 in June 2025, a reduction of approximately 21.6%[107] Revenue Recognition and Sales - The company recognizes revenue from the sale of goods when control is transferred to the customer, with typical payment terms ranging from 30 to 90 days from the date of delivery[69] - The sale of sugar contributed $60,772,000 to the total revenue in 2025, compared to $44,891,000 in 2024, marking a 35.5% increase[115] - Sales with a related party surged from $2,905,000 in 2024 to $15,193,000 in 2025, marking a significant increase of 421.5%[133] - Customer A's revenue contribution rose from $8,731,000 in 2024 to $19,481,000 in 2025, an increase of 123.3%[135] Legal and Regulatory Environment - As of June 30, 2025, there were no pending or threatened claims and litigation, indicating a stable legal environment for the Company[142] - The company operates through wholly owned subsidiaries in Singapore, focusing on trading agricultural commodities such as sugar, rice, and oil and fat products[1] Accounting Policies and Standards - The unaudited interim condensed consolidated financial statements are prepared in accordance with US GAAP, reflecting the pooling of interest method for consolidation[43][46] - The company has adopted recent accounting standards with no material impact on its financial position or results of operations[85] - The company is evaluating the impact of ASU 2023-09 on its financial statements, which requires additional disclosures on income tax[88] - The company adopted ASU 2023-07 with no material impact on its financial position or cash flows, enhancing segment disclosure requirements[87] Share Structure - The company has adopted a dual-class share structure, with Class A shares carrying one vote and Class B shares carrying thirty votes each[111] - On June 22, 2023, shareholders approved a subdivision of each issued and unissued ordinary share into 2,325 ordinary shares, reducing the par value to US$0.000000430108 per share[36] Subsidiaries and Operations - The company has incorporated several new subsidiaries, including Davis Commodities Pte. Ltd. on September 15, 2023, which is also focused on trading agricultural commodities[39] - As of June 30, 2024, the effective ownership of Maxwill Pte. Ltd. and its subsidiaries is 100%[42]