Chairman’s Statement Email This Print This

CHAIRMAN'S STATEMENT

Dear Valued Shareholders,

On behalf of the Board of Directors of Greenyield Berhad and its Subsidiaries (“Greenyield” or the “Group”), it gives me pleasure to present to you the Annual Report and Audited Financial Statements for the financial year ended 31 July 2018.
 

ECONOMIC REVIEW
For the financial year ended 31 July 2018, despite achieving higher revenue, the Group recorded a net loss of RM0.40 million compared to a net profit of RM0.22 million in the previous financial year. This is due to reduced margins resulting from continued weakness in the commodity markets and higher group operating costs. The average price for SMR20 rubber dropped from RM5.95/kg in FY17 to RM4.80/kg in FY18, prompting our plantation segment customers who are primarily rubber plantations, to continue cutting costs. Nevertheless the Directors, Management team, and staff, worked hard towards resolving and mitigating negative factors.
 

FINANCIAL PERFORMANCE
For the financial year ended 31 July 2018, the Group recorded higher revenue of RM42.52 million as against RM30.67 million for the previous financial year. The profit before tax was RM0.15 million as compared to RM0.56 million in the financial year 2017. The revenue obtained from both the plantation and non-plantation segments recorded an increase from the previous financial year.

The revenue from the plantation business segment was RM20.20 million as against RM15.92 million in the financial year 2017. In the case of non-plantation segment, the revenue was RM22.32 million as compared to RM14.75 million achieved in the previous year. Despite these, the group recorded a net loss because of margin compression and higher operating costs as described earlier.

The outlook for the coming financial year is challenging as the Group expects weak commodity prices to persist while global manufacturing and trade activities are likely to be negatively impacted by the trade war between the United States and China. However, in the longer term, the Group is optimistic because of the development of new products and markets for the non-plantation segment. In addition, the Group has invested into rubber estates in Kelantan which is expected to provide a stable source of recurring income once it reaches maturity.
 

RESEARCH AND DEVELOPMENT
The Group has invested an expenditure of RM0.19 million in R&D activities, which is equivalent to 0.45% of the revenue recorded for the financial year ended 31 July 2018.

R&D work during the year under review for the plantation business segment continues to focus on field evaluation of the various formulations of biofertilizers on selected crops to enable wider acceptance of the product by the agriculture industry including the oil palm sector.

For the non-plantation business segment, the Group continues to focus on developing new materials and a range of dinnerware products. In addition to the Artstone plant pots which the Group has been selling for many years, sales of plant pots made from ArtLumin, a material with a metallic finish, have been gaining traction. The Group has also been focused on developing dinnerware as a new product range and in the past financial year, the new products passed food grade tests according to EU standards. The Group intends to refine the product range further and focus more on marketing activities going forward.
 

BUSINESS OUTLOOK AND PROSPECTS
The Board anticipates that the business outlook will remain challenging in the forthcoming financial year. The Group will continue to look for growth opportunities while managing costs to ensure the viability of the business. These opportunities include continued new customer acquisitions and new product development in the non-plantation segment, and generating more revenue from rubber plantation ownership as opposed to purely generating revenue from being a supplier to plantations.

On 21 September 2018, the Group announced the proposed acquisitions of the remaining 70% stakes in SND Teguh Enterprise Sdn Bhd and Pullah PC Daud Sdn Bhd. Should the proposed acquisitions are finalised, the Group will have full control over 1,200 hectares of rubber estates in Kelantan which includes the existing wholly owned Tigantara Plantations Sdn Bhd. The plantations are expected to generate stable revenue and cash flows for the Group in the near future.   
 

 

DIVIDEND

The Board of Directors do not recommend a dividend payment for the financial year ended 31 July 2018 in view of the loss position and conservation of funds for investments in viable assets which are expected to generate future revenue streams . Going forward, the Board of Directors will review the Group’s cash flow affordability in recommending dividend payouts to shareholders.

 

CORPORATE DEVELOPMENT
The Company has not implemented any new corporate proposals during the financial year ended 31 July 2018. The Board will explore any related business operations and credible investment opportunities to improve the Group’s performance as well as enhance shareholder value.
 

ACKNOWLEDGEMENT
I wish to acknowledge the employees whose dedication and perseverance have contributed to the sustained operations of the Group, and ensured its reputation as a trusted and reliable partner to the Companies we served globally. On behalf of the Board, I would like to express our thanks and appreciation to our shareholders, customers, business associates, financiers, suppliers and regulatory authorities for their continued support and understanding extended to us during the year.
 

Dr Zainol Bin Md Eusof
Independent Chairman