WASCO BERHAD 22 CHIEF FINANCIAL OFFICER’S REVIEW Balance Sheet and Capital Allocation The Group achieved a notable reduction in total debt attributed to our strong operating cash flow. The Group repaid net debt of approximately RM221.9 million over the year. This reduced the Group’s net gearing to RM173.0 million as of December 2024, improving our net gearing ratio significantly from 0.48x in 2023 to 0.21x. Naturally, our cash and bank balances decreased to RM352.5 million as of FY2024, from RM410.3 million in the prior year. This proactive capital management approach aims to lower interest expenses and provide greater financial flexibility for our future needs. Additionally, it mitigates the risk of financial strain under adverse economic conditions, enhancing our financial resilience. As a result, the Group now enjoys stronger financial control, strength, and flexibility. Capital Expenditure (“CAPEX”) for FY2024 saw the Group maintain a similar level of spending compared to the previous year. CAPEX was incurred primarily for the upgrading of our Engineering and Fabrication yard in Batam, Indonesia, and the acquisition of additional plant and machinery assets for our Qatar and UK plants. Looking ahead, the Group does not expect CAPEX for 2025 to deviate significantly vis-à-vis 2024. Equity Market In 2024, despite global headwinds such as potential US trade tariffs and policies that raised fears of supply chain disruptions negatively impacting emerging market equities, the Malaysian capital market remained resilient and orderly without any observed systemic stability concerns. The Securities Commission reported that the Malaysian capital market hit an all-time high of RM4.2 trillion in 2024 (2023: RM3.8 trillion), driven by the growth in stock market capitalisation and bonds and sukuk outstanding.1 0.21 0.48 0.79 0.87 0.91 2024 2023 2022 2021 2020 Net Gearing Ratio (x) 12.00 10.00 8.00 6.00 4.00 2.00 - 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 - 02-Jan-24 23-Jan-24 13-Feb-24 05-Mar-24 26-Mar-24 16-Apr-24 07-May-24 28-May-24 18-Jun-24 09-Jul-24 30-Jul-24 20-Aug-24 10-Sep-24 10-Oct-24 22-Oct-24 12-Nov-24 03-Dec-24 24-Dec-24 Price Volume Price (RM) Volume (m) Share Price Movement and Volume Traded Period: 2 January 2024 to 31 December 20242
RkJQdWJsaXNoZXIy NDgzMzc=