Corporate Overview

The Group’s resilient performance for the financial year ended 31 December 2022 was mainly driven by the steady growth in Solar Photovoltaic (“PV”) industry. Propelled by our desire to grow the renewable energy industry, we seek to expand our operations leveraging on the deeply rooted experience backed by long established track records. The Group is currently operating a total capacity of 11MWac of solar plants in Malaysia and will pursue and commit to increase its investment in the solar renewable energy business with the objective to increase its market share in this industry.

Financial Performance Review

RM’ million 2022 2021 Changes
Revenue 16.28 14.76 10.3%
Gross Profit 4.23 4.43 (4.5%)
(Loss) / Profit Before Tax (1.55) 13.01 (111.3%)

For the current financial year ended 31 December 2022 (“FYE 2022”), the Group posted revenue of RM16.28 million which was 10.3% higher than the revenue of RM14.76 million for the corresponding period in the preceding year (“FYE 2021”). The higher revenue from the solar energy & related business segment of the Group’s operations in Malaysia is from the effort of the team in securing new solar rooftop projects and other related projects. Gross profit (“GP”) is lower at RM4.23 million, compared to the GP of RM4.43 million in prior year mainly attributed to our projects during current year mainly consist of trading of solar panels which carry a lower GP margin.

Group’s loss before tax for FYE 2022 was RM1.55 million as compared to RM13.01 million profit before tax recorded in FYE2021. The net decrease of RM14.56 million was mainly due to the following: –

Net increase in profit (inclusive of finance income/cost) 0.69
Decreased in value from Investment in Associate 17.34
Increased in non-essential expenditures 1.78
Increased in gain from dissolution of a subsidiary 3.86
Net decrease in profit before tax 14.56

The Group net profit attributable to shareholders for FYE 2022 was RM0.17 million compared to its preceding year profit of RM8.32 million.

The earnings per share in FYE 2022 is 0.1 sen as compared to 4.4 sen in FYE 2021.

Challenges to Operating Activities

One major operational challenge faced by the Group is the increasing competitive market over the recent years and continuous evolution of the industry. The Group faces competition from both local and international competitors, which resulted in competitive pricing in the market. To overcome these challenges by emphasizing on the quality of the solar PV system offered at an attractive price.To achieved that, our Group implement effective procurement system which include bulk purchase of solar PV modules and ensuring availability of sufficient labour to execute projects through regular meetings with customers and contractors to discuss on the project schedule and implement plans accordingly.
Adequate working capital for procurement is essential to prevent any disruption in project progress due to insufficient funds. The Group’s internal funds and available banking facilities has enabled the Group to procure the necessary materials required efficiently.
In addition, the Group is activelyapproaching public and private entities to secure solar energy projects through the Supply Agreement with Renewable Energy to increase its revenue levels in this solar renewable energy business segment.

Business Risks

The Group has charted its growth in solar industry while remains cognisant of its risk factors and continues to closely monitor its financial, business, operational and strategic risks. The Group has identified and put in place mitigation initiatives to mitigate the risks identified.
The business nature of the solar industryis subjected to various regulations and policies set by the authorities. As part of the mitigation initiative, the team constantly monitor for updates through local authorities’ official platforms as well as engage with the relevant business associations for latest development.
In addition, the nature of solar PV Engineering, Procurement, Construction and Commissioning (“EPCC”) works is project based and therefore, posing a risk that we may not be able to sustain our continued business growth unless we continue to secure numerous EPCC solar PV projects. To minimize the risk exposure, our Group consistently explores to venture into Power Purchase Agreement projects with the aim to sustain long-term recurring revenue stream.
Moving Forward
In 2021, the Malaysian Government through the launching of Malaysia Renewable Energy Roadmap for 2022 to 2035 has set target to reach 31% of renewable energy share in the national installed capacity mix by 2025. This target supports Malaysia’s global climate commitment is to reduce its economy-wide carbon intensity (against GDP) of 45% in 2030 and a further reduction of 60% in 2035.
We are also encouraged by the recent government announcement approving the allocation of 1,200 MW of solar power as well as a new option for businesses to procure renewable energy through the virtual power purchase agreement through a quota of 800 MW.
With the Malaysian Government continuous encouragement through positive measures and incentives, the solar photovoltaics industry in Malaysia is on the rise as a result of strengthening government support and growing investor confidence.
The Group will continue to put in effortto reap the business opportunities in the solar photovoltaics industry in Malaysia to achieve growth in revenue and net profit. At the same, improve sustainability/environmental, social and governance.
The management would like to express their gratitude to the Board of Directors, shareholders, clients, business partners, contractors and financiers for their support.