KUB Malaysia Berhad Annual Report 2021

The Group Managing Director’s Statement and Management Discussion & Analysis Our subsidiary KUB Telekomunikasi Sdn Bhd (‘KUB Telekomunikasi’) are an established market player in the Malaysian ICT industry, with expertise spanning infrastructure solutions, maintenance support and services, ancillary services and supply of ICT equipment to leading public and private sector companies. KUB Telekomunikasi is also a Network Facility Provider (‘NFP’) license holder from the Malaysian Communications and Multimedia Commission (‘MCMC’). In FP2021, KUB Telekomunikasi commenced of slew of new projects, thereby delivering revenue of RM38.3 million during the period in review. However, due to the impact of MCO restrictions on interdistrict movement and commerce, the fulfilment of various ongoing projects was delayed, leading to a loss after tax (‘LAT’) of RM2.0 million. Looking at the period in totality, FP2021 was undeniably challenging with a confluence of factors hampering both the initiation of new projects and the fulifilment of existing contracts. This included sluggish demand from Telekom Malaysia Berhad (‘TM’), who are our biggest customer in the division, slow progress on the ongoing MYTV Broadcasting Sdn Bhd (‘MYTV’) maintenance project, as well as the delay in rolling-out our build and lease towers in Terengganu. Coupled with MCO restrictions and the resultant reduction in customer demand, this formed an inoptimal operating environment for the division. ICT Division Our divestment has also enabled us to channel capital expenditure towards the upgrading of facilities and infrastructure at our other estates. At our estates in Mukah, Sarawak, RM5.2 million was spent on the upgrading, repair and resurfacing of 59km of estate main and field roads, thereby enhancing our ability to evacuate and deliver fresh fruit bunches (‘FFB’) to our customers. Looking ahead, we have earmarked RM6.3 million for further enhancements to the Mukah estate namely the Sungai Buloh and Sungai Nape estates, both of which have been hampered by a lack of reliable estate infrastructure. To this end, RM3.0 million will be spent on road access, land and buildings improvements across these two (2) estates, with the expenditure covering the installation of new infrastructure such as fertiliser stores, genset houses and workshops, improvements to water treatment plant, and the upgrading of workers’ quarters to enhance living conditions. At the same time we are pressing ahead with phased replanting exercises to ensure reliable production volumes in the years to come, commencing with our Sungai Buloh estate, estimated at approximately RM3.3 million. We are excited about the possibilities that our new, streamlined approach to the division will bring, and optimistic that our infrastructural and operational investments will result in higher margins and a larger contribution to the Group’s earnings in years to come. We have also taken over the management of both estates, transitioning from the outsourcing arrangement which was previously in place. From 1 August 2021, we assumed full control over the operations and are planning to introduce a holistic estate management and investment strategy encompassing infrastructural improvements, cutting-edge planting and nutrition management processes, and precision agriculture technologies, led by a new management team and centrally optimised through a data-driven performance management system. 20 KUB MALAYSIA BERHAD