璋利国际(01693) - 2024 - 年度业绩

Financial Highlights Financial Highlights FY2024 revenue from continuing operations increased, but the Group turned from profit to gross loss, resulting in a significant decline in overall profitability Financial Highlights Summary | Metric | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Revenue from Continuing Operations | RM 117.1 million | RM 110.1 million | ▲ 6.4% | | Gross (Loss)/Profit from Continuing Operations | (RM 7.3 million) | RM 4.3 million | ▼ From profit to loss | | (Loss)/Profit Attributable to Owners of the Company | (RM 1.2 million) | RM 11.9 million | ▼ From profit to loss | | Basic (Loss)/Earnings Per Share | (RM 0.06 sen) | RM 0.66 sen | ▼ From profit to loss | Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income FY2024 revenue from continuing operations increased, but higher sales costs led to a gross loss, resulting in an overall loss attributable to owners despite profit from discontinued operations Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Item (RM '000) | FY2024 | FY2023 | | :--- | :--- | :--- | | Continuing Operations | | | | Revenue | 117,070 | 110,110 | | Cost of Sales | (124,361) | (105,766) | | Gross (Loss)/Profit | (7,291) | 4,344 | | (Loss)/Profit Before Tax | (8,483) | 7,286 | | (Loss)/Profit from Continuing Operations | (8,206) | 6,797 | | Discontinued Operations | | | | Profit from Discontinued Operations for the Year | 9,180 | 4,462 | | Total Profit for the Year | 974 | 11,259 | | (Loss)/Profit Attributable to Owners of the Company | (1,164) | 11,878 | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets, equity, and net current assets significantly decreased, primarily due to the disposal of BGMC Bras Power Consolidated Statement of Financial Position Summary | Item (RM '000) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Non-current Assets | 50,605 | 49,431 | | Current Assets | 120,871 | 139,448 | | Assets Classified as Held for Sale | – | 213,932 | | Total Assets | 171,476 | 402,811 | | Current Liabilities | 101,796 | 140,724 | | Liabilities Directly Associated with Assets Classified as Held for Sale | – | 104,839 | | Total Liabilities | 150,454 | 294,129 | | Net Assets | 21,022 | 108,943 | | Total Equity | 21,022 | 108,943 | Notes to the Consolidated Financial Statements The notes detail the financial statements' basis, policies, and key matters, including going concern uncertainties, primary revenue from construction, BGMC Bras Power disposal, contingent liabilities, and a proposed share consolidation Basis of Preparation The financial statements are prepared on a going concern basis, despite significant uncertainties due to the current year's loss, with the Group's ability to continue dependent on new contract cash inflows, mezzanine financing, and debtor repayments - The auditor's report highlights that the Group incurred a loss of RM 8.206 million from continuing operations for the year, indicating a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[18][107] - Management considers the going concern basis appropriate, based on cash flow forecasts for the next 21 months, including: (i) cash inflows of approximately RM 23.79 million from new construction contracts; (ii) ongoing mezzanine financing arrangements; and (iii) continuous debtor repayments[18][20] Revenue and Segment Information In FY2024, the Group's total revenue from continuing operations was RM 117.1 million, primarily from building construction, with the Buildings and Structures segment contributing RM 115 million in external revenue but recording a RM 6.86 million loss Revenue by Source | Revenue Source (RM '000) | FY2024 | FY2023 | | :--- | :--- | :--- | | Building Construction Revenue | 116,522 | 107,451 | | Supply and Installation of Lifts | 415 | 37 | | Management Fee Income | 133 | 2,622 | | Total | 117,070 | 110,110 | FY2024 Segment Performance | FY2024 Segment Performance (RM '000) | External Revenue | Segment (Loss)/Profit | | :--- | :--- | :--- | | Buildings and Structures | 115,007 | (6,855) | | Energy Infrastructure | – | – | | Mechanical and Electrical | 1,515 | (537) | | Earthworks and Infrastructure | – | 4,220 | | Others | 548 | (936) | | Subtotal | 117,070 | (4,108) | Discontinued Operations On April 26, 2023, the Group completed the disposal of its 95% equity interest in BGMC Bras Power, a renewable energy subsidiary, classifying it as a discontinued operation, which generated RM 10.05 million in profit for FY2024 - The Group completed the disposal of its 95% equity interest in BGMC Bras Power, a renewable energy business, on April 26, 2023[36][67] - This disposal generated RM 10.05 million in profit for FY2024 (for the period from April 1 to 26, 2023), recognized as profit from discontinued operations for the year[38] Earnings/Loss Per Share In FY2024, the Company recorded a basic loss per share of RM 0.06 sen, a decline from FY2023's RM 0.66 sen earnings per share, primarily due to losses from continuing operations (Loss)/Earnings Per Share Summary | (Loss)/Earnings Per Share (RM sen) | FY2024 | FY2023 | | :--- | :--- | :--- | | Basic and Diluted | | | | From Continuing and Discontinued Operations | (0.06) | 0.66 | | From Continuing Operations | (0.58) | 0.42 | | From Discontinued Operations | 0.52 | 0.24 | Contingent Liabilities The Group faces several significant legal disputes, including arbitration with Customer A for approximately RM 83 million in counterclaims and a lawsuit with a bank for approximately RM 5.5 million related to a bank guarantee; management believes it has valid defenses and has not made provisions - The Group is involved in an arbitration dispute with Customer A regarding a construction contract termination, with Customer A filing a counterclaim of approximately RM 83 million; the case is ongoing, with a hearing expected in October 2025[49][50][51] - Group subsidiary BGMC Corporation faces a lawsuit for approximately RM 5.5 million related to a bank guarantee claim, and another for approximately RM 0.285 million involving a demand notice and winding-up threat; management believes it has valid defenses and has made no provisions for these lawsuits[51][53][55] Events After Reporting Period Subsequent to March 31, 2024, the Group established Golden Sun Solar Energy Sdn. Bhd., a new indirect wholly-owned subsidiary for power plant construction; additionally, on June 19, 2024, the Board proposed a share consolidation on the basis of 50 existing shares into 1 consolidated share, pending shareholder approval - On June 19, 2024, the Board proposed a share consolidation, merging every 50 issued and unissued shares into 1 consolidated share[57] - On April 5, 2024, the Group established Golden Sun Solar Energy Sdn. Bhd., a new indirect wholly-owned subsidiary primarily engaged in power plant construction[57] Management Discussion and Analysis Business Review The Group's business primarily comprises construction services and concession and maintenance; in FY2024, construction services were core, contributing 99.5% of Group revenue and securing a new RM 540 million contract, significantly increasing outstanding orders to RM 610 million, while the concession and maintenance segment largely ceased operations due to a core asset disposal Construction Services Segment The construction services segment contributed RM 116.5 million in revenue in FY2024, accounting for 99.5% of the Group's total revenue, with the Buildings and Structures segment being the primary driver; this segment secured a new RM 540.6 million contract, increasing total outstanding orders to RM 610.4 million as of March 31, 2024 - The construction services segment secured a new contract with a fixed sum of RM 540.6 million[61] - As of March 31, 2024, the Group's outstanding orders totaled RM 610.4 million, primarily from the Buildings and Structures segment, a significant increase from RM 157.2 million in the prior year[61][62] Concession and Maintenance Segment Following the disposal of 95% equity interest in BGMC Bras Power (a large-scale solar photovoltaic power plant project) on April 26, 2023, this segment's operations have largely ceased; the disposal aimed to resolve disputes with financing partners, avoid additional capital injection, and recover investments - The Group completed the disposal of the large-scale solar photovoltaic power plant project (BGMC Bras Power) on April 26, 2023, recognizing a disposal gain of RM 10.1 million in FY2024[65][67] - The primary reasons for the disposal were to resolve disputes with former financing partners, avoid additional capital injection, and recover investments; the Group stated it would continue to seek similar project opportunities in the future[67][68] Financial Review In FY2024, the Group's revenue grew to RM 117.1 million due to new projects, but increased costs led to a RM 7.3 million gross loss and deteriorating margins; the RM 1.2 million loss attributable to owners, a significant decline from last year's RM 11.9 million profit, was also due to higher legal fees and the absence of prior year's performance bond provision reversals - Revenue increased to RM 117.1 million, primarily due to securing a new project valued at RM 540.6 million[69] - A gross loss of RM 7.3 million was recorded (compared to a gross profit of RM 4.3 million last year), mainly due to increased raw material prices and construction costs[70] - Loss attributable to owners of the Company was RM 1.2 million (compared to a profit of RM 11.9 million last year), with the deteriorating performance attributed to worsening gross profit, increased legal and professional fees, and the absence of a significant performance bond provision reversal recorded in the prior year[71] Liquidity, Financial Resources and Capital Structure The Group's financial position improved, with the net gearing ratio significantly decreasing from 0.28 times in FY2023 to -0.24 times, primarily due to the settlement of advances; cash and bank balances increased to RM 37 million, though net current assets substantially decreased from RM 107.8 million to RM 19.1 million due to the disposal of BGMC Bras Power - The net gearing ratio significantly decreased from 0.28 times in FY2023 to -0.24 times[76] - Cash and bank balances (including fixed deposits) increased to RM 37 million, up from RM 29.9 million in the prior year[76] - Net current assets significantly decreased to RM 19.1 million from RM 107.8 million in the prior year, primarily due to the disposal of BGMC Bras Power, which resulted in zero assets classified as held for sale[77] Future Prospects Despite industry challenges like fluctuating material costs and labor shortages, management remains optimistic, planning to leverage opportunities from Malaysian government economic initiatives such as the National Energy Transition Roadmap; the company's strategy focuses on sustainable growth, including using eco-friendly building materials, exploring renewable energy projects (solar, biomass), and enhancing staff training to maintain competitiveness and achieve long-term development - Management believes the Malaysian government's National Energy Transition Roadmap (NETR) and New Industrial Master Plan 2030 (NIMP) offer significant opportunities for the construction industry[87] - The company's strategic focus is to expand its project portfolio, with a particular emphasis on environmental sustainability, including using eco-friendly building materials and exploring renewable energy projects such as solar and biomass[88] - The company will address challenges such as uncertain construction material prices, rising financial costs, and skilled labor shortages by remaining agile, proactively responding to market changes, and enhancing team training[90][91] Other Disclosures Dividends The Board has resolved not to recommend any dividend payment for FY2024, consistent with the prior fiscal year - The Board has resolved not to recommend any dividend payment for the current reporting period (FY2023: Nil)[47][92] Corporate Governance and Compliance The Company is committed to maintaining high standards of corporate governance and has adopted the Corporate Governance Code as set out in Appendix C1 of the Hong Kong Stock Exchange Listing Rules; the Company complied with the applicable code provisions during FY2024 - The Company has adopted the Corporate Governance Code as set out in Appendix C1 of the Listing Rules and complied with its applicable code provisions during FY2024[102] - Following inquiry, all Directors confirmed compliance with the standard code for securities transactions by Directors during FY2024[104] Auditor's Report Summary UHY, the auditor, highlighted in its report that the Group incurred a loss from continuing operations in FY2024, indicating a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern; however, the auditor did not modify its audit opinion based on this matter - The auditor's report emphasized 'Material Uncertainty Related to Going Concern'[107] - The report noted that the Group incurred a loss of RM 8.206 million from continuing operations for the year ended March 31, 2024, indicating a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern; the auditor did not modify its opinion on this matter[107]