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 2017.
 

ECONOMIC REVIEW
The commodity market remained generally weak during the financial year ended 31 July 2017. This was reflected in the reduced demand for the Group's agriculture chemicals and fertilizers. Lower sales in Europe also negatively affected the Group’s non-plantation division. For the financial year ended 31 July 2017, the overall revenue was lower than the previous financial year. Nevertheless the Group managed to remain profitable due to dedicated staff putting in extra hours of diligent work to resolve and mitigate negative factors.
 

FINANCIAL PERFORMANCE
For the financial year ended 31 July 2017, the Group recorded a lower revenue of RM30.67 million as against RM37.30 million for the previous financial year. The profit before tax was RM0.56 million as compared to RM3.63 million in the financial year 2016. The revenue obtained from the plantation segment decreased slightly compared to that of the previous year, while the non-plantation segment showed a decrease from the previous financial year.

The revenue from the plantation business segment was RM15.92 million as against RM16.49 million in the financial year 2016. In the case of non-plantation segment, the revenue was RM14.75 million as compared to RM20.81 million achieved in the previous year.

The Group had a challenging financial year ended 31 July 2017 with lower revenue and profit, mainly due to weaker demand of plant pots from Europe as a result of over-orders in the previous year. In addition, performance in the plantation segment remained weak due to low commodity prices. The outlook for the coming financial year is volatile because of only moderate recovery in advanced economies and commodity markets. However, in the longer term, the Group is optimistic because of new plant pot models and entry into new markets in the non-plantation segment. Also, the Group is confident about its on-going Research and Development (“R&D”) into products such as housewares, biofertilizers and biorepellents.

RESEARCH AND DEVELOPMENT
The Group has invested an expenditure of RM0.33 million in R&D activities, which is equivalent to 1.07% of the revenue recorded for the financial year ended 31 July 2017.

R&D work during the year under review was focussed on field evaluation of the various formulations of Biofertilizers on selected crops to enable wider acceptance of the product by the agriculture industry. In addition, work was initiated to find niche markets for products such as Biofertilizers and Green Plus G 2 particularly in the Oil Palm sector. Work is also in progress in improving the Biorepellant formulations and developing better methods of field application since this is potentially a huge market in view of the extensive damage to various agricultural crops by animal pests during the initial years after field planting. Large scale evaluation of enhanced Ethephon Plus formulation was initiated to confirm promising data obtained from field trials. R&D work is in progress to develop a suitable rat bait for use in the plantation industry.

For the non-plantation business segment, the Group focused on developing new materials and new products such as dinnerware, picture frames, and window blinds. The Group believes that its Artstone material which is unique because of its travertine look, will be suitable for a broad range of housewares. The Group has begun showcasing its dinnerware samples in tradeshows and expects increasing positive response.
 

BUSINESS OUTLOOK AND PROSPECTS
The Board anticipates that the business outlook will remain challenging in the forthcoming financial year, but is optimistic that the non-plantation sector will record a reasonable level of growth in view of continuing efforts diversify the portfolio of products and seek new customers internationally.
 

DIVIDEND
The Board of Directors aims to maintain the Company’s policy of stable dividend payout to shareholders. The Board has proposed to declare a single-tier final dividend of 0.30 sen per ordinary share for the financial year end 31 July 2017, subject to the approval of the shareholders at the forthcoming Fifteenth Annual General Meeting.
 

CORPORATE DEVELOPMENT
The Company has not implemented any new corporate proposals during the financial year ended 31 July 2017. 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 sustainable growth of the Group, and ensured its commitment to be 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