KUALA LUMPUR: Kumpulan Perangsang Selangor Bhd (KPS) will emphasise on preserving liquidity and safeguard its present operations and business prospects as it expects the Covid-19 pandemic to impact its financial performance this year.
Its managing director and group CEO Ahmad Fariz Hassan said KPS started 2020 with three challenges in the operating environment. They were a moderation in global economic growth, ongoing US-China trade tension and escalated risks emerging from Covid-19 pandemic.
In a statement issued on Tuesday after the 43rd AGM which was conducted entirely through live streaming, he said these challenges caused a subdued outlook, affecting business sentiment globally and locally.
He pointed out the impact of the pandemic on its business and its subsidiary operations was first felt in March this year.
“The group experienced slow recoverability from the disruption in supply chain and reduced demand from customers in China, Indonesia, Malaysia and the US as manufacturing activities around the world started to decline with less sanguine economic prospect, ” he said.
Due to these challenges, Ahmad Fariz said KPS would continue to monitor its manufacturing businesses, expecting better clarity of a fuller impact of the pandemic on the group’s profitability in the second quarter this year, when the demand of its products normalises to a new equilibrium.
He also said the board had to take a far-sighted and independent view towards financial prudence and sustainability amid challenges arising from the pandemic.
Hence, the board had resolved to preserve liquidity and safeguard the group’s present operations and business prospects.
The board did not recommend to the shareholders any final dividend for the financial year ended 31 December 2019.
“We expect the pandemic to have a material impact to the remainder of the group’s financial performance this year.
“In managing this expectation, tasks ahead will require levels of responses and depth of resilience, focussing first on the aspects of operations that we can control in protecting the group’s business locally or globally.
“Whilst maintaining our operational resilience and financial capacity, we shall ensure KPS’ business continuity and remain diligent in executing our business plans, striving to maintain the continuance of value creation across all our subsidiary companies, ” he said.
As for 2019, he described it a year of continuing success for KPS in terms of higher revenue and profitability.
“Over the years, we have grown our business and made a significant improvement in earnings visibility. The businesses we had acquired in recent years have delivered the results and positioned us for long-term growth.
“Our 2019 financial results indeed affirm the group’s determination to further solidify our fundamentals despite headwinds in business landscape ahead of us”.
In FY19, its revenue rose 49% to RM866.8mil from RM582.3mil in 2018.
Its manufacturing businesses grew by 82%, contributing RM650.9mil, or 75.1%. The trading, infrastructure and licensing businesses remained significant, contributing RM117.4mil or 13.5%, RM51.4mil or 5.9%, and RM36.3mill or 4.2% to the group’s revenue, respectively. Property investments contributed to the remaining RM10.8mil or 1.3%.
Its operating profit rose to RM76.2mil in FY19 from RM51.5mil in FY18. The main drivers of profit gorwth were Toyoplas Manufacturing (Malaysia) Sdn Bhd as well as full-year contributions from CPI (Penang) Sdn Bhd (CPI) and King Koil Manufacturing West, LLC.
These helped KPS record a profit before tax of RM55mil compared with loss before tax of RM179.6mil in FY18. Net profit was RM26.9mil compared with net loss of RM205.5mil.
The AGM which was conducted entirely through live streaming.
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