ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 17 MANAGEMENT DISCUSSION AND ANALYSIS ESPM is handling the Group’s first offshore project in Myanmar. Having deployed its assets and services in April 2018 (early FYE 2019) for PCML, a subsidiary of PETRONAS, FYE 2020 marked the first full year of revenue of RM50.06 mil (FYE 2019: RM46.36 mil) and PBT of RM5.26 mil (FYE 2019: RM0.47 mil). To improve ESPM’s operational efficiency and effectiveness for this project, ESPM acquired its maiden vessel (Ratu ENRA) and SPM for deployment in Myanmar. We view these strategic acquisitions positively as these assets will open up more similar business opportunities and strengthen our position within this sub-segment of the O&G industry. The Energy Services division also included maiden contributions from 2 new businesses that we initiated in FYE 2019, namely the provision of energy-saving lighting solutions and parts supply & provision of after-sales services for rotating equipment such as gas turbines. These two businesses generated total revenue and PBT of RM6.70 mil and RM0.52 mil respectively in FYE 2020. PROPERTY DEVELOPMENT FYE 2020 FYE 2018 FYE 2019 # RM16.8 mil RM2.6 mil RM2.9 mil RM0.7 mil RM52.0 mil (RM0.6 mil) Revenue PBT Note: # FYE 2019’s PBT excluded Exceptional Items of RM9.30 mil due to a write down on inventories. In FYE 2020, this division recorded a total of RM51.96 mil in revenue (FYE 2019: RM2.89 mil) that was attributable to 2 projects - 1 each in Malaysia and in the UK. All 4 units of Portland Chambers, our first overseas property development project that was completed in February 2019, were successfully sold for GBP9.14 mil (or RM48.43 mil) by February 2020. Shamelin Star, our project in Cheras, Kuala Lumpur, contributed RM3.53 mil (FYE 2019: RM2.89 mil) in sales from the sale of 5 residential units (FYE 2019: 4 units). As at 31 March 2020, we still have 7 unsold units of Shamelin Star. The division registered an LBT of RM0.58 mil in FYE 2020 as compared to FYE 2019’s PBT excluding Exceptional Items of RM0.68 mil (FYE 2019’s LBT including Exceptional Item: RM8.59 mil). The division incurred higher operating expenses during the year under review in preparation for future developments. FUTURE PROSPECTS By early 2020, various governments had imposed lockdowns, banning both domestic and international travel in their effort to curb the spread of the COVID-19 virus. Furthermore, oil & gas prices have been volatile over FYE 2020 which may impact our customers’ future plans. The Malaysian Government took critical steps to curb the spread of COVID-19. It initiated a nation-wide movement control order (“MCO”) in late March 2020 that lasted 2 months before it was relaxed in early June 2020. Most businesses and government offices in Malaysia were at a standstill during MCO.