Kimlun Corporation Berhad Annual Report 2019

Annual Report 2019 Kimlun Corporation Berhad Our Performance For FY2019, we achieved revenue of RM1.30 billion, which was 28.7% higher compared to RM1.01 billion registered in the financial year ended 31 December 2018 (“FY2018”). The higher revenue achieved in FY2019 was mainly attributable to higher revenue achieved by the construction and manufacturing and trading (“M&T”) divisions. Despite of the higher revenue achieved, we recorded a lower profit attributable to owners of the Company of RM58.39 million, which was 4.5% lower compared to the results achieved in FY2018. This was mainly attributable to lower profit generated by the construction division which had a project mix with higher composition of lower margin contracts. Business Review During FY2019, we secured, amongst others the following sizable projects and sales orders: (i) main building works for 2 blocks of apartments in Selangor (“the Project”) for a contract sum of RM204.40 million; (ii) the construction of 232 units of houses in Mukim Pulai, Johor for a contract sum of RM38.33 million; and (iii) the supply of pre-cast concrete pipes to Singapore Deep Tunnel Sewerage Phase 2 projects for Singapore Dollar 15.39 million. Looking Ahead Though the Group is supported by an estimated construction and manufacturing balance order book of approximately RM1.3 billion and RM0.24 billion respectively as at 31 December 2019, the Board takes cognizance that the Group’s near term growth and financial results are expected to be impacted negatively by the recent outbreak of the Coronavirus (“Covid-19”) which has adversely affected economies worldwide. Based on Bank Negara Malaysia’s estimates, Malaysia’s GDP growth is projected to be between -2.0% and +0.5% in 2020, affected by weak global demand, supply chain disruptions and Covid-19 containment measures both abroad and domestic. For the Group, the impact on business operations has not been a direct consequence of the Covid-19 outbreak, but a result of the measures taken by the Malaysia Government and Singapore Government to contain it. These are unprecedented and challenging times for the Group. As the outbreak continues to evolve, it is challenging to predict the full extent and duration of its impact on business of the Group. 11 CHAIRMAN’S STATEMENT DEAR SHAREHOLDERS, ON BEHALF OF THE BOARD OF DIRECTORS (“THE BOARD“), I AM PLEASED TO PRESENT THE ANNUAL REPORT OF KIMLUN CORPORATION BERHAD (“OUR COMPANY”) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (“FY2019”).