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F i m a C o r p o r at i o n B e r h a d ( 2 1 1 8 5 - P ) •
A n n u a l R e p o r t 2 0 1 8
In FYE2018, the Division registered
revenue and PBT of RM140.78 million
and RM25.48 million, respectively, a
decrease of 39.7% in revenue and
57.3% in PBT compared to the previous
year. The decline in revenue and PBT
were due in large part to the expiry
of a major supply contract for travel
documents in Q1 of FYE2018 which in
turn led to a significantly lower top-line
contributions from this sub-segment
i.e. from RM119.79 million last year to
RM21.31 million.
The share of results of associate
company, Giesecke & Devrient Malaysia
Sdn. Bhd. also decreased to RM1.70
million from RM2.69 million last year.
The Division’s retained earnings stood
at RM250.47 million in FYE2018
(FYE2017: RM273.38 million), providing
us with the financial flexibility to seize
any new market opportunities as and
when they arise. Trade receivables
increased by 39.3% y-o-y to RM81.13
million. A significant amount of the trade
receivables arises from customers with
whom the Division has had a long-term
relationship and therefore the Division
is of view that there is no significant
concentration of credit risk and that the
receivables are collectable.
We expect the declining volumes from
the travel documents sub-segment
to persist. Nevertheless, we see
potential in the transport, foreign and
confidential documents sub-segments
which cumulatively have generated
approximately RM112.84 million in
revenue, coming in at combined y-o-y
growth of 6.6%. We anticipate that
volumes from these sub-segments will
drive revenue growth and become a
larger component of our overall business
in the near term. Because products from
these sub-segments generally have lower
margins than travel documents, we also
estimate that despite the said revenue
growth, there will be some contraction to
the Division’s overall gross profit margins
before they stabilise and can resurge.
During the year under review, the
Division spent RM1.28 million on capital
expenditure (“CAPEX”) compared to
RM1.81 million last year, representing
a decrease of 29.3%. CAPEX during
Revenue
(RM ’million)
233.35
2017
140.78
▼
39.7%
2018
Profit Before Tax
(RM ’million)
59.61
2017
25.48
▼
57.3%
2018
FYE2018 is largely restricted to assets
needed to meet or maintain the Division’s
operational requirements. We had
equipped our IT support staff with mobile
devices to enhance the way they access,
store and report information. Notable gains
include reductions in both operational staff
time and total management costs, as well
as improved customer engagement.
We are acutely aware of competitors
targeting our niche markets. Further, we
also recognise how rapid changes in
technology are revolutionising customer
and business expectations thereby forcing
changes on traditional business models.
This is the “new normal” of our business.
The Division’s strong performance over
the past many years means expectations
are, rightly, set at the highest level. The
true test, however, lies in our ability to
deliver through economic cycles, adapt
to changing customer expectations and
industry megatrends. So to address these
new norms, we will continue to evolve our
business and adjust our portfolio to take
advantage of new market opportunities.
We have maintained investment in
products and services to support our
customers and broaden our offerings. We
have focused and will continue to focus
our efforts on activities and opportunities
that can help create sustainable value
in a business environment that is vastly
different than the last decade. During
the year we had reduced the size of our
total workforce by 10.8% - a decision
that was not taken lightly - in order for the
Division to remain competitive at lower
levels of economic activity. Cost structures
must be aligned with volumes and while
rationalising a business is always painful,
resetting our cost base will bring future
benefits from the eventual upturn in our
end markets.
At the same time we are also putting
emphasis on strategic partnerships and
collaborations built around technology-
driven ID and security solutions and
services to build capabilities which
can open up additional markets and
enhance our competitiveness, both
local and overseas. We believe these,
along with continued focus on efficiency
improvements will help create the path for
improved results going forward.
Revenue Contribution
by product
0.6%
1.3% 2.9%
5.3%
8%
15.1%
66.9%
Foreign Business
Travel Documents
Transport
Confidentials
Stamps, Postal &
Banking Documents
Others
Certificates & Passes
manufacturing division