Dear Shareholders, On behalf of the Board of Directors of Metronic Global Berhad (“MGB” or “the Company”), it is my pleasure to present the Annual Report 2019.
The Malaysian economy posted a growth of 4.7% in 2018 mainly contributed from private consumption and improvement in commodity related sector. While construction sector registered a moderate growth of 4.5% attributed mainly by civil engineering, specialized construction activities and non-resident buildings.
OPERATING ENVIRONMENT OVERVIEW
In 2018 and first half of 2019, the uncertainties in the global economy heightened due to several underlying frailties and geopolitical tension especially with the intense trade war between the United States and China which sparks global volatility not only across commodities but spilled over towards financial markets as well. The vulnerability was inevitably intensified when the country underwent an unprecedented peaceful transition of power that paved way for a new Government for Malaysia in May 2018. The new Government, as part of the effort to consolidate its fiscal position, had reviewed some of the policies as well as restraining execution of several large-scale projects which had indirectly deteriorated the industry’s performances.
Thus, throughout the financial period beginning July 2018 to June 2019, the Group experienced a very challenging period to secure scalable projects, underlying the slowdown and delay in awards of major projects, coupled with stiff competition between industry players vying for the declining market share in this temporarily afflicted industry.
The Group, as part of its sustainability initiative to increase its competitive advantages in order to expand its revenue base, through its wholly owned subsidiary, Metronic Engineering Sdn Bhd (“MESB”) , has stepped a major breakthrough into advance technology and Internet of Things (IoT) business by entering into Memorandum of Understanding (MoU) followed by a Joint Venture Agreement with Hong Kong Exchangelisted China Singyes New Materials Holdings Ltd’s unit Zhuhai Singyes New Materials Technology Co Ltd (“SingYes”). The collaboration amongst other, strengthened MESB’s standing as prominent smart city technology solutions provider endeavoring worldclass proven smart city technology solutions, connecting infrastructures with Internet of Things and 5G capabilities.
The Group, in the pursuit to improve its financial strength, undertook series of corporate exercises among others, rights issue with warrants and Employees Share Option Scheme (“ESOS”) to eligible employee. The exercises which was completed in April 2019 and June 2019 respectively had increased the Group’s capital by RM54 million from the cash proceeds.
On behalf of the Group, I would like to express our gratitude to the shareholders and employee for the overwhelming support for the exercises.
The successful implementation of the exercises has proven our stakeholders’ supports and confidence towards the future and prospect of the Group.
In 2019, the economy is likely to remain on a steady growth path supported by resilience of private consumption and the continuation of civil engineering projects.
In the construction sector, the growth is expected to be driven by the civil engineering subsector largely supported by ongoing mega projects, including Mass Rapid Transit (MRT) Sungai Buloh-Serdang-Putrajaya (SSP) Line, Light Rail Transit Line 3 (LRT3) in Klang Valley and East Coast Rail Link (ECRL). However subdued activities in other commercial and residential subsector is expected to weigh down the sector’s performance.
The Group is optimistic that the Group’s proven and reliable track record in rail and several other construction projects has positioned us well to attain future prospective projects.
For the coming year, to sustain growth and extend our competitive position, the Group will leverage on application of technology and talent development towards improving its business process improvement and efficiency. We are committed to accentuate the Group’s transformation program for steadfast betterment and deploy all available resources to replenish and enlarge our order book, strengthen our market position and ensure more efficient delivery of our projects. Besides, the exponential growth of technology in the revolutionized upcoming 5G will definitely spike Internet of Things (IoT) ecosystem especially through the Group’s imminent smart city technology projects, empowering the Group to emerge as a soaring leader in the industry once again!
APPRECIATION AND ACKNOWLEDGEMENT
Over the period from 1 July 2018, there were two new members appointed to the board namely Encik Muhammad Faliq Mohd Redzuan and Mr Ong Tee Kein who was appointed on 6 September 2018 and 17 April 2019 respectively.
On behalf of the Board, I would like to express our most welcome to Encik Muhammad Faliq and Mr Ong whom we strongly believe that their invaluable experiences and professionalism would steeply benefit the Group to another height.
On behalf of the Board, I would also like to thank the Group’s management members, shareholders, customers, suppliers, business associates, bankers and other stakeholders for their continued support.
The appreciation also goes to our employees for their continued dedication and commitment. We look forward for better performance in 2019 and ahead.
On behalf of the Board
Dato’ Zaidi Bin Mat Isa @ Hashim