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Kumpulan Fima Berhad (11817-V) •
Annual Report 2018
Profit Before Tax (“PBT”)
declined by 4.9% or RM4.19
million to RM80.48 million compared to RM84.67 million
recorded last year. The drop in Group PBT was mainly due
to lower contributions from Manufacturing and Food Divisions
by 57.3% (RM34.13 million) and 79.1% (RM5.16 million),
respectively.
The sharp decrease in the Manufacturing Division’s PBT was
primarily due to the expiry of a major supply contract for
travel documents. In addition, the weak Kina has significantly
affected the Food Division’s PBT due to forex losses of RM8.53
million in its PNG subsidiary, International Food Corporation
Ltd. Meanwhile, Plantation Division recorded PBT of RM28.34
million on the back of improved revenue.
The results reflect the Group’s overall strategy to reposition
our portfolio and expand the Group’s plantation land banks to
provide sustainable earnings for the Group as over the years,
the Group’s main growth driver has been the Manufacturing
Division. Plantation Division’s revenue has been on the
uptrend over the last 5 years and we expect the Division’s
earnings to continue to improve on the back of the projected
upward trend in FFB production as more areas in the Group’s
greenfield estates attain maturity; and offset the decline in
contributions from Manufacturing Division.
Gross Profit
for the Group declined 9.5% to RM188.40 million
from RM209.07 million on the back of lower revenue recorded
despite lower cost of sales in FYE2018.
The Group recorded improved
Gross Profit Margin
of 39.1%,
2.9% higher compared to last year’s 38.0% due to improved
result in Plantation Division. The division registered 48.4%
Gross Profit Margin against 43.2% last year due to higher yield
per hectare as well lower depreciation and amortisation on
property, plant and equipment and biological assets following
to the impairment made last year.
Share of Results of Associates
recorded loss of RM0.48
million as compared to a profit of RM2.86 million last year
on the back of lower contributions from Giesecke & Devrient
Malaysia Sdn Bhd and Marushin Canneries (M) Sdn Bhd.
PAT
decreased to RM48.77 million from RM50.43 million
in previous year due to lower PBT during the year. Taxation
charged for the period decreased to RM31.72 million from
RM34.24 million recorded in the previous year. In FYE2017,
the Group recorded higher effective tax rate of 40.4% as
compared to effective tax rate of 39.4% during the year mainly
due to certain expenses such as impairment on property, plant
and equipment and biological assets are not allowable for tax
deduction.
Profit Attributable to Equity Holders
of the Company
improved 7.4% or RM2.22 million from RM29.84 million
recorded in FYE2017 to RM32.06 million in FYE2018.
The Group’s
Retained Earnings
FYE2018 stood at RM322.33
million against RM315.38 million in the previous financial year
due to the variance arising from dividend payment of RM25.40
million compared to the profit attributable to the equity holders
of the Company of RM32.06 million.
Shareholders’ Equity
stood at RM997.59 million, down 2.8
% mainly due to dividend payment and translation of forex
losses incurred by foreign subsidiaries during the year totalling
RM25.40 million and RM22.04 million, respectively.
Return on Average Equity (“ROAE”)
for FYE2018 was 4.8%
(FYE2017: 5.0%) based on an average shareholders’ equity of
RM1,012.00 million (FYE2017: RM1,012.85 million).
Capital employed is the total amount of capital that a company
utilises that a company utilised in order to generate profits.
Return on Average Capital Employed (“ROACE”)
during
FYE2018 declined to 7.7% from 8.0% recorded in the previous
financial year.
Liquidity and Capital Resources
The Group’s
capital expenditure (“CAPEX”)
and working
capital requirements have been financed by cash generated from
operations and a mix of short-term bank credit facilities. This
provides the Group with a balanced range of funding sources.
The Group’s
Cash and Bank Balances and Short Term Cash
Investments
stood at RM287.18 million in total, 26.5% lower
from a year ago of RM390.78 million mainly due to net cash
used in investing and financing activities namely, payment of
dividends amounting of RM50.53 million, net repayment of
borrowings of RM10.12 million, net purchase consideration
of the Group’s new subsidiary FCB Eastern Plantations Sdn
Bhd (formerly known as Java Plantations Sdn Bhd) totalling
RM4.56 million, CAPEX of RM32.50 million and net cash used
in operating activities of RM7.52 million.
Net Cash Flow Generated from Operating Activities
recorded deficit of RM7.52 million despite generating
operating profit of RM102.12 million resulting from net changes
in receivables and payables balances. Receivables recorded
in FYE2017 were lower compared to FYE2018 by RM24.97
million due to payment received towards end of FYE2017. The
proceeds were subsequently utilised to pay various suppliers,
which as a consequence reduced the Group’s trade and other
payables by RM56.37 million in FYE2018. The Group also paid
RM29.66 million in taxation expenses.
For FYE2018, the Group incurred a total of RM32.50 million
for CAPEX comprising of biological assets expenditure
(RM18.69 million) and property, plant & equipment (RM13.81
million). The Group retains strong discipline on CAPEX, with
generally conservative business considerations and realistic
benchmarks used to commensurate with the nature and risks
of the activity or project.
Management discussion and analysis