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3 months quarter 2012 vs. 3 months quarter 2011
The Group's revenue decreasedsignificantly compared to the corresponding quarter of preceding year. The decrease was mainly due to decrease in industrial machinery sales and cessation of oil palm seedlings sales. As disclosed in Note A10, the Group disposed its oil palm seedlings segment during the fourth quarter of 2012.The industrial machinery sales decreased principally due to deferment of shipment to the first quarter of 2013, as requested by customers.
The Group suffered loss before taxation of RM1,774,000in 2012, comparing to RM493,000profit in 2011. Theloss was mainly due to decrease in revenue, and the disposal of the Indonesian and China subsidiaries amounting to RM436,000.
Financial year 2012 vs. financial year 2011
The revenue of industrial machine engineering service increased 27% whereas the oil palm seedlings decreased 75%; principally due to exclusion of full year consolidation of the Indonesian subsidiary which was disposed off on 1st November 2012.
The Group suffered loss before taxation of RM2.3 million in 2012, comparing to RM3.2 millionprofit in 2011. The loss was mainly due to impairment of assets in the China and Indonesian subsidiaries amounting to approximately RM1.8 million and RM0.9 million respectively.
The Group also suffered foreign exchange losses of RM0.4 million, comparing to the contradicting gain of approximately RM1.2 million due to weaker Ringgit against US Dollar and other major currencies.Commentary on Prospects
Despite the debt crisis in Europe and dwindling economic growth in China which had drastically affected the global economy recovery, the demand for industrial processing machinery and production lines manufactured by the Group is still looking positive. The prices of agricultural commodities such as rubberisexpected to stablize due to slow but steady global economic recovery. The stableprice will motivate the key players in these industries throughout the world to invest more on their new or replacement of their existing rubber processing machinery.The continued expansion in demand both locally and overseas especially for African and ASEAN countries will auger well for the Group's businesses in the short run.However, the Group remains cautious about competition from those local and overseas competitors.
The Group has recently invested in a seventeen (17) levels office tower, located within Kota Damansara, Selangor, in order to broaden and expand Group's earnings base and improve its long term growth prospect. The Group also endevours to enter into other property development and property related businesses.
The Group is cautiously optimistic on its short-term future prospect, barring any unforeseen circumstances.