BALANCE SHEET MANAGEMENT Our balance sheet reflects prudent financial management amidst challenging times. We ended the year with lower borrowings of RM774 million compared with RM857 million last year, demonstrating our ongoing commitment to reducing financial leverage and enhancing financial stability. REVIEW OF INCOME STATEMENTS Revenue In 2023 our revenue reduced to RM852 million, attributed primarily to lower palm product prices and reduced sales volumes. Operating Costs The operating costs, while lower than the previous year at RM750 million, reflecting our stringent cost control measures and efficiency improvements across our operations, still placed considerable pressure on our profit margins. Finance Costs Finance costs were higher at RM40 million during the year, compared with RM34 million in the previous financial year despite a reduction in total borrowings. This was primarily due to the increase in Malaysia’s Overnight Policy Rate (OPR) by Bank Negara Malaysia, with OPR averaging at 2.75% to 3.00% in 2023 compared with 1.75% in 2022. Nonetheless, we continue to uphold our commitment to optimising capital management and enhancing our debt profile. Taxation and Zakat Taxation and zakat for the year amounted to RM35 million, consisting of RM31 million in taxation and RM4 million in zakat payment. The Group’s effective tax rate for the year however is higher than the statutory tax rate mainly due to the unabsorbed tax losses and certain expenses which were non-deductible for tax purposes. This figure underscores our commitment to compliance and fiscal responsibility. REVIEW OF STATEMENTS OF FINANCIAL POSITION Total Assets Our total assets slightly decreased to RM4.0 billion, reflecting the impact of lower current receivables and cash balances. Current receivables reduced to RM43 million mainly due to the settlement of outstanding proceeds from plantation land disposal, while cash balances lessened as a result of declining operational cash inflows. Total Liabilities Total liabilities were carefully managed down to RM1.2 billion from RM1.4 billion in 2022, as part of our efforts to strengthen our financial foundation and reduce our debt burden. This is reflected in lower borrowings of RM774 million in 2023, primarily due to repayment of term loans amounting to RM118 million during the financial year. Total Equity Total equity was stable at RM2.8 billion, reflecting the challenging operational environment but also our resilience in maintaining a solid equity base. REVIEW OF STATEMENTS OF CASH FLOWS In 2023, cash and cash equivalents stood at RM63 million, a reduction from RM166 million in the previous year. Reduced customer collections resulting from weaker palm product prices had an adverse impact on our cash position. Nevertheless, our commitment to improve age profile and better infrastructure remained as planned whereby we spent a total of RM153 million on replanting and capital expenditure as against RM86 million in 2022. FFB evacuation via mechanisation at Telok Sengat Estate, Johor Integrated Report 2023 033
RkJQdWJsaXNoZXIy NTkwNzg=