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Fima CORPORATION Berhad
(197401004110) (21185-P) •
Annual Report 2020
23
FYE2020 saw many profound, unsettling
events. The domestic economy continues
to feel the impacts of volatile commodity
prices, subdued investor and consumer
sentiments on the back of continuing US-
China trade tensions and sharper-than-
expected slowdowns in major economies.
All these are further compounded by
global spread of the Covid-19 pandemic,
raising anxiety that the world economy
could tip into an outright recession.
In the context of the tough economic
environment, I believe the strategy set by
the Board for the FYE2020 was appropriate
and responsible. Our strategy was simply
to focus on what we can control, to
ensure that all of our investments and
acquisitions are operating optimally, to
generate healthy cash ows and sustaining
the strength of our balance sheet.
The detailed analysis of the results for the
year is presented on page 26 to 31 of this
Annual Report.
Manufacturing division’s revenue declined
by 0.6% to RM134.00 million, impacted by
a combination of market dynamics namely,
the secular declines in volumes as well
as changes in order patterns for certain
product segments. Intense competition
within the security printing industry has
served to further increase pressure on the
division’s profit margins.
Plantation division’s results were impacted
by several factors. In addition to the
impairment losses noted earlier, PTNJL
could not effect any crude palm kernel oil
(“CPKO”) sales in the first three quarters of
FYE2020 due to regulatory issues related to
the plant’s operating licence thus resulting
in an acute 73.6% decline in the quantity
of CPKO sold year-on-year. Moreover,
operating costs were higher due primarily
to costs incurred towards the development
of the Group’s Malaysian estates which are
mainly in the early stages of development.
Partially offsetting these negative factors
were the favourable increase in the
volume of FFB harvested by the Group’s
Malaysian estates. The Group’s crop is
rising as more areas attain maturity. This
is a consequence of the development of
our estates in Kelantan and Terengganu in
the last few years which we hope would be
further augmented by the acquisition or
development of newly acquired plantation
assets.
On 27 November 2019, we announced
that the judicial review application by
the Menteri Agraria dan Tata Ruang/
Kepala Badan Pertanahan Nasional
(“BPN”) against PTNJL, was allowed
by the Mahkamah Agung vide its
written decision which was received by
PTNJL’s solicitors on 27 November 2019
(“the Decision”). Subsequently on 28
November 2019, PTNJL filed a civil suit
in the Pengadilan Negeri Jakarta Selatan
against BPN and PT Adindo Hutani Lestari.
The President Republik Indonesia and
Menteri Lingkungan Hidup dan Kehutanan
Republik Indonesia have been named as
co-defendants in the said suit. PTNJL is
seeking legal recognition of its rights over
land title Hak Guna Usaha No. 01/Nunukan
Barat (“HGU”) and to restrain the local
authorities from issuing any new licences
or approvals to any parties on or within
the HGU. PTNJL is also seeking an order
from the court to stay the enforcement of
the Ministerial Order dated 25 July 2016
pending full and final determination of the
matter by the Indonesian courts.