Our Energy Services segment demonstrated significant growth, with a 12.4% increase in revenue to RM2.3 billion, fuelled by successful project executions. Noteworthy achievements include securing landmark contracts such as the RosmariMarjoram Pipeline Coating Project, Crux Pipeline Pipe Coating Project and a fabrication contract for Schneider of Pre-Fabricated Building an energy project in Africa, bolstering our order book to RM2.9 billion, providing a clear revenue visibility for the coming year. Similarly, our Bioenergy Services segment recorded a respectable 8.4% revenue growth to RM288.8 million, underpinned by increased demand for biomass energy projects as well as agro-tech equipment for the industries we serve. Our commitment to innovation and sustainability was further evidenced by the successful introduction of the biomass-fired cogeneration boiler, showcasing our leadership in renewable energy solutions. Maximising Shareholder Value Through Efficient Capital Allocation Central to our financial strategy is the efficient allocation of capital, aimed at optimising returns and enhancing shareholder value. In pursuit of this objective, we have undertaken the strategic initiative to divest non-core assets, including our trading business. This decision reflects our dedication to refining our portfolio to focus on core competencies and high-growth opportunities within the energy and bioenergy sector. The rationale behind the decision to divest non-core assets is grounded in several strategic considerations: Focus on Core Competencies: By divesting noncore assets, we can concentrate our resources and efforts on core business segments where we possess distinct expertise and competitive advantages. This strategic focus enables us to enhance operational efficiency and drive sustainable growth in areas aligned with our long-term objectives. Value Optimisation: The divestment of non-core assets allows us to unlock value and reallocate capital to strategic initiatives with higher growth potential and returns. By streamlining our portfolio, we aim to maximise shareholder value and strengthen the overall financial performance of Wasco Berhad. During the year, we have also successfully disposed parcels of land in Bukit Kemuning, Shah Alam and in Seberang Perai, Pulau Pinang, thus unlocking value for the Group and generating net proceeds of approximately RM46.2 million. Centralised Treasury Operations: Enhancing Efficiency and Control In line with our commitment to operational excellence, Wasco Berhad has embarked on a journey to centralise treasury operations, streamlining processes, enhancing efficiency, and strengthening control over financial activities. By consolidating cash management, liquidity planning, and risk management functions, we aim to optimise cash flows, mitigate financial risks, and ensure compliance with regulatory requirements more effectively. This centralised approach enables us to leverage synergies across business units, optimise banking relationships, thereby supporting our strategic objectives and driving long-term value creation. By fostering a culture of accountability and transparency, we aim to instil confidence among our stakeholders and fortify our position as a trusted custodian of capital. Our weighted average cost of capital (“WACC”) is currently at 7.4% which is below the sector average of 8.2%. We have proactively managed our debt levels and costs to ensure that the company is in a healthy financial position. In financial year 2023, we have used part of the proceeds from the divestment of non-core assets to reduce our net debt levels, further strengthening our balance sheet and providing us with the flexibility to pursue strategic growth initiatives. As at end 2023, our cash and cash equivalent balance is RM 386.7 million, and our net gearing stood at 0.5 times. Chief Financial Officer’s Review 41 Wasco Berhad
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