PRG Holdings Berhad Annual Report 2018

FUTURE PROSPECTS The on-going trade spat between United States with China and other countries have raised uncertainty in the market which resulted in lower global growth projection. The group anticipates the prospect of the manufacturing business in the near future to remain challenging as customers remain cautious on purchases pending clearer settlements of the trade disputes. Apart from that, raw material costs especially the crude-oil based yarn remains volatile in line with the crude oil price. Adverse movement either way will affect the gross profit margin of the Manufacturing Division. Furthermore, any significant movement in the exchange rate between RM and USD may also result in foreign exchange gains or losses, which may affect the Manufacturing Division’s performance as the division derives a significant amount of its revenue in USD. Property market outlook in Malaysia for 2019 remain challenging with the overall economy sentiments affected by the threat of global and local slowdown and uncertainties in the financial markets. Market sentiments are adversely influenced by the rising cost of living, affordability issue and property supply- demand imbalance. In view of these adversities, the Group will continue to focus on sales and marketing efforts on the Picasso Residence project, and strengthening its presence in the property development through collaborations with strategic partners. We also strongly believe that the affordable properties will be in demand especially in the prime areas of Selangor and Kuala Lumpur. In addition, the Group will continue to seek earnings accretive acquisitions, while strengthening its investments in the healthcare segment. OUTLOOK It is expected that market operating conditions in Malaysia and the region to remain challenging and the key focus of the Group in year 2019 is to streamline and strengthen its core businesses, in order to embrace the challenges ahead. With the well stated strategic plan in place, we are committed to deliver and enhance shareholders’ value in the longer term. ACKNOWLEDGEMENT I would like to take this opportunity to thank all our valued customers, shareholders, business associates and partners for their continuous support and confidence in the Group over the years. On behalf of the Board, I would also like to express my heartfelt thanks to the management and staff of PRG for their continued commitment, dedication and contributions, particularly over the course of this challenging period. We look forward to our shareholders’ dedicated support as we work hard to overcome all challenges while working on other opportunities to ensure a sustainable growth in our business. Dato’ Lua Choon Hann Group Managing Director group managing director’s management discussion and analysis (continued) PRG HOLD I NGS BERHAD 19