We implemented the following measures to mitigate the impact of the aforesaid challenges to the Group’s business: (i) communicate with suppliers as to their stocks readiness and procure alternative suppliers/supplies to improve supply chain lead times; (ii) placement of advance bulk purchase orders to lock in raw materials supply at a better bulk purchase price; and (iii) adoption of IBS construction, whenever possible, to reduce reliance on labour. In view of the supply chain constrictions, massive shortage of labour and volatility in raw materials prices, the Group had been very cautious in pursuing order book replenishment and had resulted in lower order book replenishment in FY2022. OUR BUSINESS PERFORMANCE Our revenue increased from RM691.09 million in FY2021 to RM756.13 million in FY2022, mainly attributable to low base effects, as the Group’s operation was substantially curtailed in FY2021, during the nationwide Full Movement Control Order 3.0. Our gross profit (“GP”) increased from RM50.10 million in FY2021 to RM86.54 million in FY2022, on the back of higher revenue and improved GP margin of 11.4%. Our GP margin in FY2022 had benefited from the followings: (i) revenue combination with higher proportion of the Group revenue contributed by the more profitable manufacturing and trading division; (ii) stronger Singapore Dollar against Ringgit Malaysia enhanced the profitability of our Singapore sales orders; and OUR OPERATING ENVIRONMENT Malaysia entered into the transition of the COVID-19 endemic phase on 1 April 2022 after battling the virus outbreak for two years. The transition saw gradual relaxations in various COVID-19 related restrictions, including the removal of restrictions on business operating hours and reopening of the country’s borders, enabled normalising of economic activities. The operating landscape of the construction industry was very challenging during FY2022 despite the improvement in productivity. The industry continued to suffer from the pandemic-inflicted supply chain disruptions and supply constrictions, rising cost of raw materials and massive shortage of workers. The outbreak of the Russia-Ukraine war in February 2022, further exacerbate the escalation in raw materials prices via steep increases in a range of commodity prices. ON BEHALF OF THE BOARD OF DIRECTORS (“THE BOARD”), I AM PLEASED TO PRESENT THE ANNUAL REPORT OF KIMLUN CORPORATION BERHAD (“OUR COMPANY”) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 (“FY2022”). DEAR SHAREHOLDERS, CHAIRMAN’S STATEMENT Annual Report 2022 12
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