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performance
Annual Report 2017
25
SEGMENTAL profit before tax (“pbt”)
2017 Contribution
2016 Contribution
RM’million
% RM’million
%
Manufacturing
59.6
97.2
54.0
69.9
Plantation
(0.7)
(1.1)
21.3
27.6
Share of results of associate
2.7
4.4
1.6
2.0
Property Management
(0.3)
(0.5)
0.4
0.5
Group results
61.3
100.0
77.3
100.0
The Group’s PBT
decreased by 20.7% to RM61.3 million
from RM77.3 million recorded in the previous financial year. The
decrease is solely due to impairment losses on property, plant and
equipment and biological assets in a subsidiary, PT Nunukan Jaya
Lestari (“PTNJL”) mitigated by improved CPO and CPKO prices
coupled with lower cost of sales during the year. Our plantation
estates in Kelantan and Terengganu which are undergoing land
development and palm planting recorded RM2.5 million pretax
loss during the financial year.
Financial Resources and Liquidity
The group generated a
Net Cash
of RM196.3 million from its
operating activities for FYE2016/17 against RM63.9 million in the
previous financial year. This increase reflects cash proceeds from
the trade debtors.
Gross Profit
for the Group had improved by 21.1% to RM142.5
million from RM117.7 in FYE2015/16. The Group’s improved
gross profit was mainly due to a reduction in direct costs.
The Group registered a 20.7% shortfall on
EBIT
against the
same period last year, recording RM61.3 million for FYE2016/17.
This was mainly due to RM29.4 million net impairment losses on
property, plant and equipment and biological assets of PTNJL
subsequent to the State Administrative Court’s decision on
13 June 2017 to dismiss PTNJL’s application to annul the
Ministerial Order. On 21 June 2017, PTNJL had filed an application
to the Court of Appeal to appeal against the decision of the State
Administrative Court.
The Group’s
Cash and Bank Balance
, which were primarily
denominated in Ringgit and Indonesian Rupiah, stood at
RM336.3 million as at 31 March 2017 compared to RM177.6
million last year. By our current cash position and the ability to
generate cash from operations, we believe we have the sufficient
capital resources and liquidity to meet our commitments, support
operations, and growth strategies, finance capital expenditures,
and fund declared dividends.
Shareholders’ Equity
as at 31 March 2017 stood at RM586.8
million, an increase of RM4.4 million or 0.8% over the previous
financial year.
With the decrease in PAT, the Group recorded
ROAE
of 6.0%
for FYE2016/17 as compared to 9.6% recorded in the previous
financial year.
ROACE
fell to 10.1% during the year compared to 13.0% in
FYE2015/16 due to lower EBIT recorded.
The
Share of Results of Associates
in FYE2016/17 increased
by 68.8% to RM2.7 million (FYE2015/16: RM1.6 million) on
the back of stronger contributions from Giesecke & Devrient
(Malaysia) Sdn Bhd.
CAPITAL EXPENDITURE (“CAPEX”)
During the year, the Group’s
CAPEX
decreased to RM14.0 million
compared to RM17.8 million in the previous year. The CAPEX
was incurred largely towards plantation development works, new
planting of oil palm and construction of worker’s quarters. Sources
of funds for CAPEX during the year were internally generated.
The cost of
Biological Assets
at financial year end decreased
by 33.4% to RM33.0 million compared to last year. This was
primarily due to RM24.8 million net impairment losses in PTNJL.
Additional CAPEX of RM8.7 million was incurred for plantation
development works and new planting programs at our estates in
Kelantan and Terengganu.
MANAGEMENT DISCUSSION AND ANALYSIS