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Extracted from Annual Report 2018

 

Chairman's Letter to Shareholders

On behalf of the Board of Directors of Jaya Tiasa Holdings Berhad, I am pleased to present to you the Annual Report and Audited Financial Statement of the Group for the Financial Year Ended 30 June 2018.

ECONOMY OVERVIEW

Globally it has been a year marked by geopolitical tensions and political uncertainties in many countries including Malaysia. However, the major fears since the start of our financial year including potential market crash from the outcome of the US presidential election, a Brexit-triggered recession in the UK and a collapse of the Eurozone following the implosion of the Italian banking system did not materialize. Strong US and Chinese economies have brought knock-on effects to Eurozone and major emerging countries. According to IMF, global GDP has grown at the fastest pace since the beginning of the decade.

FINANCIAL REVIEW

We closed the year with revenue of RM842 million, a 14% drop from last year primarily due to lower sales volume from the timber division. We recorded a Net Loss of RM26.6 million down from the previous Net Profit of RM14.6 million partly due to an impairment loss on investment amounting to RM30.1 million recognized during the year. Loss per share was 2.87 sen compared to 1.25 sen Earning per share in the previous year. Shareholder funds decreased to RM1,780 million compared to RM1,807 million achieved during the preceding financial year. Net tangible assets per share stood at RM1.84 for the year ended 30 June 2018.

PERFORMANCE REVIEW

FFB production improved by 6% to 1,069,340MT, while CPO production also improved by 17% with OER at an average of 18%. Nonetheless, the division’s profit before tax declined by 57% to RM45.0 million from the previous RM104.8 million mainly due to weakened commodity price compared to the previous year. The average FFB selling price was RM495 per MT, a 9% decrease, while CPO price decreased by 10% to RM2,498 per MT.

We are undertaking Sustainable Forest Management Certification in line with the State government directive resulting in the contraction of log production by 60% and plywood production by 16%. This coupled with the 74% hike in timber premium on 1st July 2017 resulted in the division’s loss of RM27.3 million in this reporting year as compared to RM10 million profit before impairment last year.

Further details on the Group’s financial performance and Certification can be found in the Management Discussion & Analysis section on pages 6 – 12 of the Annual Report.

DIVIDEND

As part of our commitment to enhancing shareholder value, the Board recommends a gross dividend of 0.5 sen per ordinary share for the Financial Year Ended 30 June 2018 for approval by the shareholders at the forthcoming Annual General Meeting to be held on 28 November 2018.

SUSTAINABILITY

The Board will continue to uphold our commitment to promote sustainability by embedding the principles more fully in our approach into the day-to-day management of the business. We will continue to protect the environment and be conscientious toward our stakeholders as a good employer, business partner and member of the community. An overview of our sustainability initiatives are covered under the “Sustainability Statement” section in the annual report starting from pages 21 – 36.

GOING FORWARD

IMF forecasted that global real GDP growth will recover to an annual rate of 3.7% in 2018. On the domestic front, there will be a lot of uncertainties following the unexpected political change.

With the mandatory directive from the State government on timber certification, the overall timber output from Sarawak has been affected, including the Group’s timber operations. Nevertheless, contribution from our timber segment will improve along with progress in the certification process and recent approvals from the authority to extract logs from the salvage logging area which will boost our log production and export in the coming financial year.

Our FFB production and CPO mill utilization are expected to further improve with more palms maturing. While commodity price is beyond our control, we will consolidate our efforts in the oil palm business and we expect satisfactory growth in this segment in the next financial year.

APPRECIATION

On behalf of the Board, I would like to convey our sincere thanks to the management team and all employees of the Group, whose undivided support and dedication has been crucial and necessary for the Group’s future growth. I am grateful to our shareholders, customers, business partners, bankers, the relevant authorities and members of the community for your invaluable support and deep trust in the Group.

GEN TAN SRI ABDUL RAHMAN BIN ABDUL HAMID (RTD)
Chairman

 

 

No.1-9, Pusat Suria Permata,
Lorong Upper Lanang 10A,
96000 Sibu, Sarawak, Malaysia.
T. - 255
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inquiry@jayatiasa.net