Business review

Tan-Sri-Datuk-DrFor the financial year under review, the Group reported a turnover of RM520 million and a profit before tax of RM101 million, which represent a 61% and 31% increase in turnover and profit before tax respectively, over the preceding financial year.

Overall the increase in revenue and profit before taxation for the Group were mainly attributable to the improvement in the palm oil equipment and special purpose vehicles segments, despite a lower contribution from the associates and jointly controlled entity.

The palm oil equipment segment recorded higher revenue and profit before taxation by 28% and 62% respectively as compared the last financial year. The increases were mainly due to higher project billing and profit margin.

The special purpose vehicles segment also recorded much higher revenue and profit before taxation mainly due to the increase in project implementation and completion during the financial year.

The share of results of associates and jointly controlled entity were lower by 47% and 99% respectively as compared to the same period last year. The lower contribution resulted mainly from the lower production and prices of palm products.

In addition, there was a gain on disposal of subsidiaries of RM148 million for the current financial year. For further details, please refer to Note (to be inserted) of the Financial Statements for the financial ended 31 December 2012.

Prospects

With the ever growing population and the rise of new economic powers in Asia (mainly in the China and India), the demand for affordable, non-subsidised edible oil is growing in tandem. The accelerated palm oil plantation development particularly in Indonesia would call for more palm oil mills to be constructed within the next three to five years. There is also a requirement for mill upgrade and rehabilitation for the purpose of better processing efficiencies.

This paints an optimistic picture for the core business of the group which is palm oil industry related. We will constantly innovate and re-invent our business strategies to tap this opportunities.

Dividend

The Company declared the following interim dividends in respect of the financial year ended 31 December 2012:-

  1. First interim tax-exempt dividend of 20% per ordinary share which was paid on 28 September 2012; and

  1. Second interim single tier dividend of 10% per ordinary share which was paid on 23 January 2013.

 

Corporate social responsibility

CBIPH aspires to be a good citizen to our country and also protector of our environment. We are in collaboration the research institutions and technology providers to work on new technology to reduce the potential pollutant from the palm oil mill industry.

We always promote safe working conditions to both our workers in the factory and at project sites. Human resource is always our assets and we emphasize constant on the job training and education as part our management focus. We provide industrial trainings of engineering students from the various local universities.

Corporate development

During the financial year 2012, the Group completed the following corporate exercises :-

  1. Bonus issue on the basis of 1 bonus share for every 1 existing ordinary share held. A total of 134,445,973 bonus shares have been issued and quoted on the Main Market of Bursa Malaysia Securities Berhad on 8 March 2012. Pursuant to the bonus issue, the Company increased its authorized share capital from RM100,000,000 comprising 200,000,000 shares to RM500,000,000 comprising 1,000,000,000 shares.;

  1. Disposals of the entire equity interest in Sachiew Plantations Sdn. Bhd. and Empresa (M) Sdn. Bhd. The disposals have been completed on 14 May 2012;

  1. Acquisitions of the entire equity interest in Admiral Potential Sdn. Bhd. and Accent Hectares Sdn. Bhd. on 22 February 2012 and 30 July 2012 respectively;

  1. Acquisition of 94% equity interest in PT Berkala Maju Bersama and PT Jadi Utama. The acquisitions have been completed on 18 April 2012; and

  1. Acquisition and subscription of the entire equity interest in MYAVP Sdn. Bhd. by AVP Engineering (M) Sdn. Bhd. (“AVP”), a 51% subsidiary of the Company. The acquisition has been completed on 23 May 2012.


The above acquisitions are expected to contribute positively to the Group s’ potential earnings, thereby enhancing its value to the shareholders.

The Group has also undertaken the following corporate exercises :-

  1. Proposed acquisition of 94% equity interest in PT Gumas Alam Subur; and

  1. Proposed acquisition of 94% equity interest in PT Kurun Sumber Rezeki.

Both the above proposals are pending the completion of the conditions precedent as stated in their respective conditional share sale and purchase agreements.


Acknowledgement and appreciation


The Board of Directors and I would like to extend our deepest appreciation and thanks to the Management and Staff of the Group for their commitment and unrelenting efforts throughout the year. With their continuous dedication, we are confident that the Group will continue to succeed in the face of the challenges ahead.

We would also like to thank our clients, business associates, respective authorities and shareholders for their continuous support and understanding extended to us during the year.


Tan Sri Datuk Dr. Yusof Bin Basiran
Chairman