Serba Dinamik Annual Report 2021

Section 5 | Management Discussion & Analysis 138 FINANCIAL PERFORMANCE O&G industry contributes the most revenue to the O&M segment • The price of oil has no direct impact on our services • Certain activities, such as the upkeep of industrial assets, are unaffected to some extent because operations must continue • As industrial assets age, they require more maintenance as they accumulate wear and tear. Our revenue is powered by our capability to secure contracts for our O&M. • We have created a track record in providing O&M services to customers in the O&G industry in the past and we intend to expand our customer base to include customers in the power generation and utilities industries. • Our capability to secure maintenance in the O&G, power generation and utilities industries will determine our revenue growth. Malaysian is our largest revenue contributor, changes in political and economic conditions in these countries could unfavourably affect our financial results. These issue uncertainties include, but are not limited to, the changes in political leadership, expropriation, nationalisation, changes in finance/interest rates or tax rates, risks of war and global economic downturn. We are vigorously expanding our customers base to include clients from other industries within our core expertise. Currently, we are tapping onto the power generation, water treatment and utilities sectors. We relentlessly monitor our bidding growth and success rates and compare it to industry and market averages to benchmark and determine our performance. We currently possess various strength factors that contribute to our competitive advantage in bidding and securing contracts. Our strengths include: i. Having 28 years’ experience in the industry; ii. Having a growing, profitable, public listed company iii. Supported by prudent financial track record; iv. Being a PETRONAS licensed company in Malaysia; v. Having strong records in HSE and having implemented various safety and quality standards for our operations; vi. Having an experienced management team; vii. Strong geographical presence in twenty-six (26) countries across six (6) regions; and viii. Owning high end maintenance service center such as Bintulu Integrated Energy Hub (“BIEH”) and Pengerang eco-Industrial Park (“PeIP”). To minimise the impacts to our performance, we have expanded the operations across twenty-six (26) countries and six (6) regions to expand our portfolio and reduce our exposure to any individual country. We also incorporate significant local participation to leverage on the local expertise and reduce the foreign element thus effectively reducing the risk exposure. Challenges Our Respond