ENRA Group Berhad Annual Report 2019

15 ENRA GROUP BERHAD ∞ Annual Report 2019 page We reported earnings before interest, tax, depreciation and amortisation (“EBITDA”) of RM9.7 million and a loss after tax and minority interest (“LATAMI”) of RM24.1 million primarily due to the following exceptional items (“Exceptional Items”) that were included in FYE 2019: a) Having successfully completed a project in Kuantan, Pahang for Gemula Sdn Bhd (“Gemula”), EEFAB initiated a claim for monies due and payable by Gemula to EEFAB in respect of the project, including via legal avenues, the results of which have been in EEFAB’s favour. EEFAB continues to pursue the full recovery of this RM16.6 million trade debt through all legal means. However, a full provision for an impairment loss of RM16.6 million was made for this as the Board took a conservative assumption of not considering the value of assets to be recovered from a winding up petition served against Gemula; and b) The Group wrote down RM9.3 million on the gross development value of Portland Chambers for FYE 2019 to reflect the prevailing volatile market sentiment in the UK, despite only completing the development in February 2019 (late FYE 2019). However, due to Portland Chamber’s unique characteristics, two units have been sold as of July 2019 and interest in the remaining two units has been active. Excluding these Exceptional Items, FYE 2019’s EBITDA is RM34.2 million (FYE2018: -RM2.4 million) while LATAMI shrunk to RM1.9 million (FYE 2018: RM6.8 million), which is representative of the Group’s operational expansion and growth. PATAMI/(LATAMI) Set out below is the Group’s performance measured via two profitability indicators: FYE 2019 REMARKS ASPECTS & INDICATORS FYE 2018 (including Exceptional Items) (excluding Exceptional Items) PROFITABILITY Return on Equity (“ROE”) (LATAMI / Equity) -4.5% -19.6% -1.6% ROEs and ROAs improved from FYE 2018 due to stronger division earnings in FYE 2019. (excluding Exceptional Items) OPERATIONAL EFFICIENCY Return on Assets (“ROA”) (LATAMI / Total Assets) -2.3% -9.1% -0.7% FYE 2019 - GROUP’S FINANCIAL POSITION OVERVIEW As mentioned earlier, the Group was conscious of the challenging environment for both oil & gas industry and property market in Malaysia, and therefore have been cautious in the deployment of our cash and paying off borrowings to reduce gearing. Some of our cash was utilised in several strategic investments that the management believed would provide long-term and steady return to the Group. Details of these investments will be further elaborated in the next sections. As such, as at 31 March 2019, the Group’s cash and cash equivalents stood at RM30.0 million (does not yet include proceeds from the sale of our two units in Portland Chambers) and gearing ratio stood at 0.14 times compared to 0.46 times in the previous financial year. RM11.9 mil (RM6.8 mil) FYE 2017 (RM24.1 mil) (RM1.9 mil) FYE 2018 FYE 2019 Excluding Exceptional Items Management Discussion and Analysis Including Exceptional Items