16 ENRA GROUP BERHAD ANNUAL REPORT 2024 Management Discussion and Analysis (Cont’d) FINANCIAL POSITION OVERVIEW ENRA ends the financial year with a positive balance sheet: • Net assets have decreased from RM86.2 million as at 31 March 2023 to RM72.3 million as at 31 March 2024; • Gearing has increased to 0.47 times in FYE 2024 compared to 0.16 times in FYE 2023; and • Cash and cash equivalents have decreased from RM12.8 million in FYE 2023 to RM5.3 million in FYE 2024. FUTURE PROSPECTS Energy Logistics The Energy Logistics division continues to be the primary contributor to the Group’s revenue. Current assets within this division include the FSO Ratu ENRA and a SPM, supported by a dedicated and technically capable team that is actively pursuing and bidding for FSO and SPM projects. This division has a golden opportunity to grow due to the strong oil & gas, and shipping markets. Elevated oil prices caused by the prevailing geopolitical environment and general high cost of extracting oil has led to an increasing number of new and marginal oil fields being developed. Furthermore, the gap between the availability and demand of vessels will take time to resolve, aggravated by the increased sailing distances due to uncertainty in the Red Sea. Consequently, the logistics of oil, gas, and related cargo for storage or transport purposes are anticipated to be in high demand and supportive of strong charter rates. In addition, the transition to renewable energy sources is experiencing its own financial and technical challenges, ensuring the relevance of the oil & gas industry for the foreseeable future. As such, we believe the outlook of this division is favourable with the team actively evaluating vessel fleet expansion opportunities as well as pursuing niche FSO and SPM solutions. Property Development Diminished external demand has tempered Malaysia’s economic expansion thus impacting buyer sentiment. Nonetheless, there has been a rise in the average listing prices of residences, coupled with cautious optimism among sellers regarding the market’s forthcoming direction. Management anticipates that the market sentiment is favourable toward landed properties. Furthermore, stamp duty exemption for residential transactions below RM500,000 for first-time home buyers, announced in Budget 2024, will help reduce the number of overhang properties complementing our affordable homes product. The Group’s development in Rugby, UK continues to face headwinds from fluctuating exchange rates, high interest rates, and supply and logistical challenges. Management will continue to assess the market conditions before reigniting the project. After assessing the property sector’s outlook for the forthcoming year, Management will continue to remain focused on opportunities primarily within Malaysia. We will prioritise the successful sale of the Group’s existing projects before embarking on the development of new sites. The Group remains open to exploring opportunities both within and beyond the affordable housing market – which remains the largest potential market in Malaysia.
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