Kimlun Corporation Berhad Annual Report 2020

PROSPECTS AND OUTLOOK MANAGEMENT DISCUSSION AND ANALYSIS 'PS BT B XIPMF UIF .BMBZTJBO FDPOPNZ DPOUSBDUFE CZ mainly attributed to the imposition of MCO during the period to contain the outbreak of COVID-19. All sectors recorded negative growth during the year, with construction sector recorded the biggest EFDMJOF BU The growth trajectory is projected to improve from the second quarter of 2021 onwards. The improvement will be driven by the recovery in global demand, where the International Monetary Fund has revised upwards their 2021 global growth forecast by 0.3 percentage points UP (SPXUI XJMM BMTP CF TVQQPSUFE CZ B UVSOBSPVOE JO QVCMJD and private sector expenditure amid continued support from policy measures including PENJANA, KITA PRIHATIN, 2021 Budget and PERMAI, and higher production from existing and new facilities in the manufacturing and mining sectors. The vaccine roll-out which will commence in February 2021 is also expected to lift sentiments. (Source: Media release of the Bank Negara Malaysia on 11 February 2021) 5IF .BMBZTJBO FDPOPNZ JT QSPKFDUFE UP FYQBOE CZ o JO 2021, underpinned by stronger external demand and higher private and public expenditure. The rollout of the National COVID-19 Immunisation Programme will improve confidence and support the economic recovery. Malaysia’s integration in fast-growing segments of global value chains and diversified external trade structure, as well as continued policy support would be key factors in driving the rebound in economic growth in 2021. $POTUSVDUJPO JT QSPKFDUFE UP HSPX CZ MFE CZ B SFTVNQUJPO of activities across all subsectors, i.e. the civil engineering segment is likely to recover in line with the ramp-up of construction activity in large infrastructure projects such as the ECRL, MRT2, and Pan #PSOFP )JHIXBZ (JWFO UIF MFTT SFTUSJDUJWF DPOUBJONFOU NFBTVSFT this sector would enjoy higher operating capacity that will allow the projects to stay on track or even ahead of schedule. (Source: Bank Negara Malaysia Annual Report 2020 released on 31 March 2021) 'PS UIF XIPMF PG UIF 4JOHBQPSF FDPOPNZ DPOUSBDUFE CZ 5IF DPOTUSVDUJPO TFDUPS TISBOL CZ B TIBSQ SFUSBDUJPO GSPN UIF HSPXUI QPTUFE JO XFJHIFE EPXO CZ XFBLOFTT JO CPUI public sector and private sector construction works. The Singapore economy is expected to see a gradual recovery over the DPVSTF PG UIF ZFBS UIF (%1 HSPXUI GPSFDBTU GPS JT UP The construction sector is projected to recover from the low base last year, however, activity levels at construction worksites will continue to be dampened by the requirement for safe management measures. The recovery in output in this sector is also expected to be slow due to the plunge in contracts awarded for construction works in 2020. (Source: Media release of The Ministry of Trade and Industry of Singapore on 14 February 2021) 5IF (SPVQ T CVTJOFTTFT BOE PQFSBUJPOT XFSF OPU TQBSFE GSPN UIF JNQBDU PG UIF NFBTVSFT UBLFO CZ UIF .BMBZTJB (PWFSONFOU BOE 4JOHBQPSF (PWFSONFOU UP DPOUBJO UIF $07*% QBOEFNJD BOE the contraction of Malaysian economy and Singapore economy in 2020. The execution of our construction projects and sales orders in Malaysia were halted during the MCO period, while the export of our precast concrete products to Singapore was severely reduced during the Circuit Breaker Order period (from 7 April 2020 to 1 June 2020), and few months after the Circuit Breaker Order period. Order book replenishment opportunities were substantially reduced due to the postponements in the award of some Singapore public sector projects from 2020 to 2021, and developers delayed or cancelled their planned roll out of new projects amidst a weak market sentiment. &YUFOTJPO PG UJNF XBT PCUBJOFE CZ UIF (SPVQ GPS JUT PO HPJOH QSPKFDUT which were affected by the MCO, and some of the delayed works and sales orders will spill over to 2021. As at 31 December 2020, the estimated construction and manufacturing balance order book of approximately RM1.1 billion and RM0.3 billion respectively, secured from a diversified clientele, XJMM DPOUSJCVUF UP UIF (SPVQ T SFWFOVF GPS BCPVU ZFBST Other than the challenges brought by the outbreak of the COVID-19 and the measures to curb the spread of the virus, our key challenges and risks include operational, credit, liquidity, human resources and market risks. Please refer to pages 53 to 54 of this Annual Report for OBUVSF PG UIF LFZ SJTLT BOE UIF (SPVQ T DPOUSPM NFBTVSFT UP NJUJHBUF the risks. Annual Report 2020 022