The growth in demand for LPG was dampened in March to May 2020 with the implementation of Movement Control Order (MCO) and slowly recovered in June as the MCO eased up gradually. However, the disruption from the COVID-19 situation is expected to persist throughout the next few months, compounded by potential adverse effects from CP instability in the medium term. Notwithstanding, the Group will implement mitigation measures to cushion the impact including enhancing the robustness of our customer and product mix model, improving supply and inventory management capabilities and initiate cost containment efforts across the division. The Group foresees economic uncertainty, market turbulence and weak consumer sentiment to remain as issues throughout FY 2020 mainly due to the COVID-19 pandemic and extreme volatility in global crude oil prices.
For the Agro division, although the overall performance has improved following the operational and cost optimisation initiatives that have been carried out combined with the absence of loss making mill, the Group intends to review the position, plan and strategies of the division with priority given to the effective management of our Group's balance sheet and cash flows. In view of this, the Group has decided to monetise the value of its oil palm estate in Kluang, Johor through disposal and would also be able to avoid incurring significant capital expenditure for the disposing estate going forward. The Group will reinvest the proceeds for its operations and expansion of its core businesses and future business opportunities as and when they arise.
The Group has secured a new ICT maintenance contract recently and hopes to expand the Group’s telecommunication business and potentially securing higher margin opportunities following the joint venture arrangement with HFR, Inc. ("HFR"). HFR mainly provides telecommunication network infrastructure equipment and services to mobile operators, carriers, enterprises and data centres in the Korean, Japanese and American markets. With HFR, KUBTEL will be able to penetrate the more lucrative segments within the telecommunication industry. Current Quarter Pre-emptive balance sheet and effective cash flow management will also be the Group’s priority in the coming quarters in order to provide us with the resilience to weather the current storm. As such, we will proactively re-assess our capital expenditure plans, tighten up operating expenditure, review investment decisions and re-optimise our capital structure where necessary.
I think price was up today because anticipating of good result....is it really a good result....not so...profit reported of about rm28m is actually the gain from asset disposal...not from the operation....
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Posted by strattegist > 2020-08-27 16:39 | Report Abuse
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