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V2Y Corporation Interim Financial Statements 1H 2025 · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:07
  Welcome back to the Deep Dive. Today, we're getting into the weeds with V2Y Corporation LTD.
• 0:14
  They're based in Singapore, and their business background is quite something.
• 0:18
  Instartech, F&B, even fruit and veg distribution. A bit of everything.
• 0:23
  Yeah, quite the mix. Exactly.
• 0:25
  So we've got their condensed interim financial statements for the first half of 2025.
• 0:30
  And, well, these numbers tell a really traumatic story.
• 0:33
  It's less about steady growth, more like major surgery, high-stakes stuff.
• 0:39
  That's a good way to put it. We want to figure out how V2Y managed to cut their
• 0:42
  losses significantly, even with some pretty big operational issues,
• 0:46
  and why their balance sheet looks completely different now.
• 0:48
  Plus, what this whole strategic pivot is about, it feels like financial triage, honestly.
• 0:53
  Let's unpack this. Yeah. And what really jumps out, I think,
• 0:56
  is that V2Y's performance in this period isn't really about operations in the traditional sense.
• 1:01
  It's almost entirely a restructuring story.
• 1:04
  You see these volatile headline numbers first, but digging deeper,
• 1:08
  you realize almost every move seems deliberate.
• 1:10
  You know, shedding liabilities, getting cash in the door. Right,
• 1:13
  let's start at the top then, the profit or loss statement.
• 1:15
  Revenue. It just soared. We're talking a 341% increase compared to last year
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  from about $138,000 up to over $600,000. Just seeing that, you'd think,
• 1:27
  wow, things are booming.
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  But that first impression, it's, well, pretty misleading, actually. You need the context.
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  That big revenue number. It mostly came from the food and beverage,
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  the F&B, and the distribution businesses. The very parts of the company they
• 1:37
  were getting ready to ditch.
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  And that's where it gets, well, almost weird financially. Because that revenue exploded.
• 1:43
  The cost of sales, it went absolutely ballistic. Up 666%.
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  From $73,000 to nearly $600,000.
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  666%. That figure just sounds ominous. It really speaks volumes,
• 1:56
  doesn't it, about how inefficient those operations must have been.
• 1:59
  And when you put that huge revenue against those skyrocketing costs,
• 2:02
  the gross profit picture completely changes.
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  Despite selling way more, gross profit basically stayed the same,
• 2:07
  actually dipped a bit by 25 percent, ended up up at just $49,000.
• 2:11
  So wait, they worked like four times harder, sold a lot more stuff,
• 2:16
  only to make roughly the same tiny bit of gross profit. Why?
• 2:21
  Why would they let those businesses run on margins that thin or like non-existent margins?
• 2:26
  Well, the segment results kind of give us the answer there. The F&B segment specifically.
• 2:30
  OK, it brought in as one hundred and seventy thousand dollars in revenue,
• 2:32
  but that revenue came at a huge cost.
• 2:34
  It actually resulted in a segment loss of S. Two hundred and fifty eight thousand dollars.
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  They were essentially paying people to take the food, it seemed. Oh, yeah.
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  The trading segment, the distribution side was a bit healthier,
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  but the F&B part was such a drain.
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  It just dragged the whole group's gross margin down to almost nothing.
• 2:51
  They literally couldn't afford to keep those F&B operations going.
• 2:54
  Okay, so operations clearly weren't driving any real profit improvement.
• 2:58
  So we need to look elsewhere for why the bottom line actually got, well, slightly better.
• 3:02
  The overall loss for the period did decrease.
• 3:05
  By S$83,000, which is about a 19% reduction, went from a $439,000 loss down to S$356,000. Yeah.
• 3:14
  But how? And this is where it gets really interesting, I think.
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  The whole story seems to pivot on one line, other income. This category jumped
• 3:21
  from like almost nothing's $9,000 last year to a massive S-296,000 in the first half of 2025.
• 3:29
  That's the game changer right there. Absolutely. That's the lifeline for the
• 3:32
  period. And it really shows the strategy.
• 3:34
  Sueing at $36,000 of that other income, it came directly from the net gain on
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  selling off three subsidiaries.
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  Evertrust F&B, Evertrust Distribution, and EVT-603. So yeah,
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  it wasn't operational success at all.
• 3:44
  It was a one-off gain from getting rid of businesses that were losing money
• 3:46
  hand over fist. Oh, okay.
• 3:48
  Selling the problem children. Basically, yes. And that disposal.
• 3:51
  That's also why the balance sheet looks so radically different.
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  If you look at the statements of financial position, non-current assets just
• 3:57
  plummeted from around S2.3 million dollars at the end of 2024 down to only S335,000
• 4:04
  dollars by June 30, 2025.
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  It shows just how much baggage those loss making businesses represented on the books.
• 4:11
  Wow, that's a huge drop, like two million dollars just gone from the asset side.
• 4:16
  What exactly were they taking out? What kind of assets?
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  So that big reduction reflects removing all the physical stuff tied to those
• 4:22
  subsidiaries they sold. We're talking plant and equipment, obviously.
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  But also two other key things. One is right of use assets or ROU.
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  That's basically the leases for the places they operated, like restaurant stalls
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  or warehouses. Those aren't on their books anymore.
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  And second, intangible assets, things like maybe lease premiums.
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  Those got written off when they sold the businesses. They really had to clear
• 4:42
  out the whole footprint, physical and contractual. Right, right. Makes sense.
• 4:45
  But even while they were selling off bits of the company, administrative expenses
• 4:49
  still went up by 33 percent from 510 Tager to 678 K. That seems strange.
• 4:56
  Backward, doesn't it? If you're shrinking, shouldn't costs go down?
• 5:01
  Well, yeah, you'd think so, but sometimes it costs money to close things down
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  and restructure, and those costs can hit before you see the savings.
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  That increase was mostly higher legal and professional fees,
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  paying lawyers and advisors for the disposal process, plus ongoing office rent
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  and also the leftover costs from running the F&D business right up until they
• 5:18
  actually sold it in April 2025.
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  So yeah, paying the professionals for the cleanup job, essentially.
• 5:23
  Okay, got it. So they tidied the books, got a paper gain from shedding assets.
• 5:27
  But did they actually get cold, hard cash? Let's look at liquidity because the
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  cash position, that actually looks much healthier on paper.
• 5:34
  Cash and equivalents jumped up to over a million dollars.
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  That's $1,061,000, up from just $134,000 at the end of last year.
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  Yeah, that cash injection was absolutely vital.
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  They needed it to deal with immediate solvency worries.
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  And that cash came from two main places. First, there was $879,000 net cash
• 5:53
  from financing activities.
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  And most of that says $957,000 was a shareholder loan, which is interesting, right?
• 6:00
  Shows some internal confidence, maybe. Or a necessity. Or a necessity, true.
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  Then, separately, they got S$204,000 from investing activities,
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  and that included S$451,000 from a share placement they completed back in April.
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  Okay, that share placement, S$451,000.
• 6:17
  Where did that specific money go? Was it for stabilizing things now or investing in the future?
• 6:22
  Good question. And the documents tell us it was almost entirely used for immediate
• 6:25
  needs, just keeping the lights on, basically, working capital for survival.
• 6:29
  Management actually broke it down. S$218,000 for employee benefits paying salaries,
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  S$160,000 for director's fees, and S$73,000 for professional fees and compliance costs.
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  So you look at that breakdown and it tells you without that cash,
• 6:44
  they would have been in real trouble covering basic obligations.
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  It shows how tight things were.
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  Yeah, definitely paints a picture. But.
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  Even with that million-dollar cash boost and selling off the problem parts,
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  the underlying stress is still there, isn't it?
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  Which brings us to the big one, the going concern issue.
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  The report notes they're still in a net current liabilities position,
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  and overall net liabilities too, about S-360,000, plus these recurring losses.
• 7:12
  Exactly. That's the fundamental risk hanging over them. So the question is,
• 7:16
  how do they plan to fix it? The financial statements lay out their strategy,
• 7:19
  sort of a multi-step plan.
• 7:21
  First, get rid of the loss-making subsidiaries. Check they did that.
• 7:24
  Second, implement more cost cuts. Try to streamline what's left.
• 7:27
  Third, and this is crucial, generate enough cash flow from the business that is continuing.
• 7:32
  And fourth, actively look for new business opportunities and probably more fundraising.
• 7:36
  Okay, hold on. Point three, they're generating cash flow from the continuing core business.
• 7:40
  We know what they got rid of. What is the core business they're left with?
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  And, like, is it realistically big enough right now to actually support the whole company? Right.
• 7:49
  The disposal confirms a total pivot. They're putting all their chips,
• 7:52
  basically, on their existing InsurTech business.
• 7:55
  What that means is providing third-party administration, TPA services,
• 7:59
  and value-added stuff for things like extended warranties and accident protection
• 8:04
  plans, mainly for electronics.
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  Okay, InsurTech. And what does that core business look like financially right now? Well...
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  In the first half of 2025, that insert tech segment brought in $19,000 in revenue, $19,000.
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  Now, they do say it's revenue generating and they want to expand it, but that number is tiny.
• 8:23
  It's a tiny fraction of the cash they just raised and a tiny fraction of the
• 8:26
  admin expenses are still running, which were what, nearly $700?
• 8:29
  $19,000 revenue against $678,000 admin costs. Wow.
• 8:34
  That's a huge gap to fill. Looking at their outlook statement,
• 8:37
  management says they believe the financial position will keep getting stronger
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  now after the disposal and the placement, assuming they refocus on insert tech
• 8:44
  and find these new opportunities.
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  They're essentially making a very high stakes bet. The bet is that the surgery
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  selling off the bad parts plus the cash injections from the loan and placement,
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  that this buys them enough time, enough runway to take that S-19,000 dollar
• 8:59
  revenue segment and rapidly scale it into something that's actually profitable and sustainable.
• 9:03
  And the fact they didn't declare any dividends, specifically saying they need
• 9:07
  the cash for future business development, that just highlights how critical
• 9:10
  every dollar is for that runway. Yeah, absolutely.
• 9:13
  Preserving cash is everything right now. OK, so if we boil it down for you,
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  the listener, V2I's first half of 2025, it was mostly a story of drastic financial surgery.
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  They had heavy operating losses from F&B, but they masked the bottom line damage
• 9:28
  with that big one time gain from selling those businesses. then they immediately
• 9:33
  brought in emergency cash, that shareholder loan, and the share placement just
• 9:36
  to keep operating. Exactly.
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  So the company is much leaner now. It's shed those physical money-losing assets,
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  and it's laser-focused, supposedly, on this insert tech segment,
• 9:46
  running on that significant cash injection that's bought them some time.