DESTINI Annual Report 2020

Management Discussion and Analysis Operational review • Destini’s aviation and defence division recorded an increase in revenue of RM85.38 million in FY2020 from RM48.97 million a year before. On the back of higher revenue, the division narrowed its losses to a LATNCI of RM0.13 million from a LATNCI of RM48.98 million in FY2019. • In 2020, many flights were grounded due to the COVID-19 pandemic which saw many countries closed its boarders. The local aviation industry saw passenger movement decline by 75.5% against 2019 with 25.8 million passengers. In tandem, local commercial aircraft movements declined by 61% to 348,787 in 2020. • With the decline in aircraft movement and the closure of many country borders, Destini’s commercial aviation business was impacted and saw zero revenue as the Group was not able to service its customers who are mainly foreign airline operators. • The Group remains cautious on its business in commercial aviation as the aviation landscape remains challenging and uncertain on the timeline of its recovery. • On the defence segment, despite securing two contracts during the year, the Group saw slower progress in project execution and lower demand for MRO services due to the MCO imposed by the Government. With less opportunities, Destini saw less billings within this division. • Meanwhile, the Malaysian Government had in December 2019 gave its approval for the Group to continue executing its remaining contract obligations in the MD350G program for a scheduled delivery in 2020. However, the delivery from the United States of America was delayed as certain contract obligations were hampered by the pandemic which had struck the country hard. • Nevertheless, Destini remains committed to fully execute its contract obligations and have the helicopters delivered in 2021. Aviation & Defence 36 ANNUAL REPORT 2020 DESTINI BERHAD