PRG Holdings Berhad Annual Report 2019

ANNUAL REPORT 2019 11 Dato’ Dr. Awang Adek bin Hussin Independent Non-Executive Chairman In 2018 investments were made to diversify the Group’s activities and revenue base through the acquisition of lands in Kelantan and business collaboration with Philipp Plein’s luxury fashion. Since then, the Group had ventured into logging and supply of teak wood after completion of acquisition of lands in Kelantan, while a new Philipp Plein flagship store was opened in Singapore in April followed by the second store in Bangkok in July, marking its first foray into the luxury fashion apparel industry. While the Group managed to grow its top-line by 57% during the financial year, loss before tax widened by more than four times, recorded at RM66.8million mainly due to one-off impairment losses of goodwill of RM34.5million, arising from the acquisition of Meinaide Holdings Group Limited (“Meinaide”) and non-profitable associates and joint venture amounted to RM8.5 million. The impairment losses were recognised from after considering the challenging global economy outlook arising from the geo-political instability, volatility of commodities market, fluctuation of foreign exchange currency and low visibility of demand. Strategic Review The Manufacturing Division completed the acquisition of Meinaide in the third quarter of FY2019. The acquisition has diversified the product base as well as making a foothold into China market. For the lands in Kelantan, the Group has initiated discussions with several parties to supply teak wood for local consumption or to export to countries like China and India. After the initial logging program, the Group will then replant the lands with either teak trees or commercial crops. CHAIRMAN’S STATEMENT cont’d