ENRA Group Berhad Annual Report 2021

LEADERSHIP ENRA Group Berhad | Annual Report 2021 18 FINANCIAL PERFORMANCE (CONT’D) Energy Services The Energy Services division’s most active businesses are specialty chemicals supply (under ENRA Kimia) and FSO services (under ENRA SPM), with a smaller subsidiary, ENRA Energy Solutions (which was introduced in FYE 2019), providing maintenance, repair and overhauling (“MRO”) services for power generation systems such as gas turbines and diesel generators. Overall, this division recorded revenue of RM111.12 mil for FYE 2021, a 36.4% decrease from RM174.68 mil in FYE 2020 primarily as a result of disruptions to customers’ operations and orders (e.g. postponed maintenance schedules) due to the pandemic, and the cyclical nature of specialty chemical and gas odorant’s sales volumes. Notwithstanding the aforementioned, operations for Energy Services were deemed an “essential service” due to its key role in supporting the oil & gas industry, and business continued as normal but with stringent standard operating procedures in place. Despite pandemic-related lockdowns in Malaysia and Australia, the specialty chemicals business was still able to deliver its products and ENRA Energy Solutions continued to provide its MRO services. Furthermore, despite the current political instability and uncertainty in Myanmar, ENRA SPM’s operations have not been affected and the contract with PCML is still operational and ongoing. As such, the Energy Services division performed admirably despite the challenges and continues to be the main revenue generator for the Group, generating 98.5% of total revenue for FYE 2021. Despite the 50.2% drop in revenue, the Energy Services division still recorded a gross profit of RM35.06 mil in FYE 2021, only a 15.2% drop compared to RM41.36 mil in FYE 2020, whilst PBT before EI dropped by only 24.2% to RM17.05 mil in FYE 2021 compared to RM19.01 mil in FYE 2020. The main contributor to this margin improvement arose from the acquisition of Ratu ENRA, which noticeably improved ENRA SPM’s operational effectiveness and efficiency. Overall, the Energy Services division, despite the initial operating cost issues in the early stages of the pandemic, has successfully acclimatised to the new operating environment. MANAGEMENT DISCUSSION AND ANALYSIS ENERGY SERVICES Revenue PBT FYE 2019 RM161.8 mil RM13.4 mil FYE 2020 RM174.7 mil RM19.0 mil FYE 2021 RM111.1 mil RM17.1 mil