Wah Seong Corporation Berhad Annual Report 2017

WAH SEONG CORPORATION BERHAD ANNUAL REPORT 2017 18 FROM THE BOARD OF DIRECTORS AND KEY SENIOR MANAGEMENT WAH SEONG CORPORATI N BERHAD ANNUAL REPORT 2017 18 DEAR SHAREHOLDERS, Wah Seong Corporation Berhad (“WSC” or “the Company”) is an investment holding company with business interest in three distinct business segments, namely, oil and gas, renewable energy and construction industries (collectively referred as the “Group”). 2017 was a strong comeback year for the Group. Driven by the strong performance recorded by the oil and gas segment, the Group achieved an impressive turn around in net profit after tax of RM114.6 million on the back of a strong order book of RM3.65 billion at the beginning of the financial year. During the year the Group also executed its plans to unlock and realise capital appreciation of its assets in order to strengthen its balance sheet. On 24 th July 2017, the Company’s subsidiaries entered into a Sales and Leaseback Agreement with RHB Trustee Berhad acting on behalf of Axis Reit for its land and building in Kuantan, Pahang and registered a gain of RM99.4 million from the transaction. The Group expects further asset rationalisation exercise going forward to further strengthen its Balance Sheet position as the Group shapes a more agile and profitable future. In line with the above, the Company also embarked on a rationalisation and streamlining initiative involving disposal of non-core businesses. On 21 st December 2017, the Company announced the divestment of its Plantation business segment WS Agro Industries Pte. Ltd. for a consideration of RM24.5 million (USD6.0 million). The consideration was based on the carrying value of WS Agro’s investments in the plantation business. Consistent with the disclosure of business segments in the financial statements and the management discussion and analysis presented last year, discussion of factors affecting the Group’s performance and risk will be deliberated by segments. Overview of the Group’s business and operations, its objectives and strategies MANAGEMENT DISCUSSION AND ANALYSIS