Annual Report 2023
KUB Malaysia Berhad
NURTURING VALUE
The cover of this year’s annual report depicts a butterfly perched upon a digital globe, symbolising our recent transformational efforts and the opportunities that lie ahead for our expansion.
During the past few years, we have acted decisively to streamline our operations and drive greater efficiencies. As a result, our Group is now more stable, putting us in a strong position to build for the future. However, much like a butterfly chooses its nectar, our future success will depend on our ability to nurture value through carefully considered strategic initiatives that maximise our capabilities and build new and sustainable streams of income for the long term.
Group Managing Director's Statement
Dear Valued Shareholder,
FY2023 was undoubtedly a year of turbulence, both at the macroeconomic level and in the context of our business.
During this time, geopolitical challenges in the form of the Russia-Ukraine conflict and the USA-China trade war have continued to have a destabilising effect on the global economy, resulting in persistently high inflation and elevated raw material prices. Meanwhile, the deconsolidation of our oil palm plantation business under KUB Sepadu Sdn Bhd (‘KUBS’) in June 2022 meant that we were suddenly unable to fully operate a division of our business that had formerly contributed 8% of Group-wide revenue, resulting in a fairly large hit to our topline.
However, even after factoring in these negative impacts, we have recorded a strong financial performance, with higher profit after zakat and tax (‘PAT’) than the year before and growing financial reserves in the form of cash and bank balances. This illustrates the resilience of our business and is a testament to the longer-term efforts we have made to streamline and de-risk our operations by disposing of our non-core/non-strategic businesses, rationalising our overheads and driving operational efficiencies.
As a result, we are now in a position to invest more resources in our core businesses and on potential new opportunities, with a focus on enhancing the quality of our earnings, driving efficiencies and Nurturing Value – the theme of this year’s annual report. In seeking to expand our business, however, we are cognisant that effective planning and execution of strategies is essential. We must be patient in order to capitalise on the most appropriate opportunities, and it is vital that we tread carefully and without haste in an economic environment that continues to be characterised by uncertainty, weak consumer sentiment and market volatility.
With this said, I hope that you will take the time to read the analysis that follows and gain a clearer picture of the strategies we are deploying to lay a foundation for sustained growth and expansion in the future.
Financial Performance Review
Largely due to the deconsolidation of KUBS, which was the sole contributor to our Agro Division, our revenue suffered a decline in FY2023, falling from RM548.0 million to RM488.9 million (a decrease of 11%).
Despite this, our PAT during the year under review increased by a significant 41%, from RM24.1 million to RM33.9 million. This substantial increase was driven in part by the recognition of a gain on fair value of investment in KUBS (classified under ‘Other Investments’ in our financial statements), totalling RM13.4 million, and was also aided by a more than 100% jump in the profitability of our LPG division.
– Ahmed Fairuz bin Abdul Aziz
Financial Highlights
5 year group financial highlights
Sustainability Statement
Welcome to the KUB Sustainability Statement 2023
This statement follows transparent reporting standards and shares the Group’s commitment to sustainable business operations. KUB publishes this statement annually, together with the Annual Report. It includes progress and performance in the context of activities relating to economic, environmental, social and governance (‘EESG’) considerations from 1 July 2022 to 30 June 2023 (‘FY2023’), unless specified.
Corporate Governance
The Board of KUB Malaysia Berhad (‘KUB’ or the ‘Company’) is committed in ensuring that good corporate governance is observed and practiced throughout KUB and its Group of Companies. The Board of Directors (‘the Board’) recognises that maintaining good governance is important for business and key to delivering shareholder value.
This statement provides an overview of KUB Group of Companies’ application of the principles set out in the Malaysian Code of Corporate Governance 2021 (‘MCCG 2021’) and the Main Market Listing Requirements (‘MMLR’) of Bursa Malaysia Securities Berhad (‘Bursa Securities’). This statement is to be read together with our Corporate Governance Report 2023 which can be downloaded from KUB’s website at www.kub.com or from Bursa Securities’ website.