Wah Seong Corporation Berhad Annual Report 2021 35 MANAGEMENT DISCUSSION AND ANALYSIS The challenges of 2020 continued into 2021. The pandemic continued to affect Global Markets especially in the areas of logistics, human capital movement and capital spending for most of 2021. Things started to show signs of recovery towards the end of 2021. Our Group was not spared from these issues. Due to restrictions that occurred as a result of the pandemic, some activities were carried out over a longer period than had been originally anticipated and in some cases deferred to a later start date due to disruption in the global supply chain. Project awards were also delayed, which in turn affected the start dates. All of this had an adverse impact on the financial results of the Group. Despite these challenges, the Group managed to generate a slightly higher revenue in 2021. Excluding one-off adjustments, mainly due to Associate and Joint Venture Companies, the Group delivered a small profit with a healthy operating cash flow. This shows the Group’s resilience in facing the challenging environment that we are faced with. As we progressed through 2021, there were signs of recovery with a number of projects finally showing signs of being awarded. This, together with the increasing new bid activity, contributed to the significant increase in the Group’s order book which now stands in excess of RM2.71 billion. This is one of the highest order books that the Group has had, and it places the Group in a strong position to deliver positive results in the coming year. Discussion on Key Financial Performance In 2021, the Group generated a revenue of RM1.43 billion, an increase of RM20.20 million. The insignificant change in revenue was mainly due to delay in the start of secured projects as well as delay in the award of new projects that were anticipated. The Group has a current order book of RM2.71 billion compared with RM1.15 billion in the previous year. This comprises of RM2.37 billion from the Oil and Gas (‘Wasco’) segment, RM0.29 billion from the Renewable Energy (‘RE’) segment and RM0.05 billion from the Industrial Trading and Services (‘ITS’) segment. In line with the disclosure of business segments in the financial statements and the discussion and analysis presented in the previous years, factors affecting the Group’s performance and risk will be deliberated by segments.
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