MANAGEMENT DISCUSSION AND ANALYSIS The increase in construction and M&T revenue in FY2022 was mainly due to low base effects as explained in the preceding section of this report. The improvement in M&T revenue was mainly attributable to the increase in inter-segment sales and external sales by RM94.87 million and RM44.23 million respectively against FY2021. The growth in M&T division’s inter-segment sales was derived from higher sales to the construction division, while the growth in external sales was derived from higher sales to Singapore on fulfillment of sales orders in hand. Property development (“PD”) division recorded lower revenue in FY2022, due to lower sales of Phase 1 of Bukit Bayu, Seksyen U10, Shah Alam project in FY2022, as most of the units under Phase 1 had been sold in FY2021. The decline in investment revenue which mainly comprised of dividend and interest income, was due to lower dividend income from other divisions. The construction division recorded a lower GP margin, while M&T division achieved a higher GP margin in FY2022, due to the reason elaborated in the preceding section of this report. PD division recorded a lower GP margin in FY2022, due to lower profit margin products were sold during FY2022. Financial Position Shareholders’ equity decreased from RM721.28 million as at 31 December 2021 to RM710.40 million as at 31 December 2022, attributable to the comprehensive loss attributable to owners of the Company of RM7.35 million and dividend paid of RM3.53 million during FY2022. Non-current assets decreased from RM377.21 million as at 31 December 2021 to RM316.77 million as at 31 December 2022, mainly due to the decrease in land held for development by RM68.39 million upon the reclassification of certain plots of land to development properties under current assets (‘Reclassification of Land”). Current assets increased from RM949.23 million as at 31 December 2021 to RM984.00 million as at 31 December 2022. This was mainly due to the Reclassification of Land, higher properties held for sale, partly offset by the impact of the aforesaid impairment of Debt and Contract Asset. Current liabilities decreased from RM444.38 million as at 31 December 2021 to RM416.17 million as at 31 December 2022 mainly due to lower trade payables and contract liabilities. Non-current liabilities increased from RM151.01 million as at 31 December 2021 to RM159.31 million as at 31 December 2022 mainly due to new loan drawn down during the year for refinancing of land bank. Net gearing ratio as at 31 December 2022 was at a manageable level of 0.25 times. Cash Flow For FY2022, the Group registered net cash from operating activities of RM52.02 million. Net cash of RM20.83 million was used in investing activities, mainly for the purchase of machineries for our construction projects and quarry operation. Net cash of RM17.16 million was used in financing activities, mainly for repayment to hire purchase creditors. With the net increase in cash of RM14.03 million during FY2022, the Group’s cash and cash equivalents was RM60.35 million as at 31 December 2022. Kimlun Corporation Berhad | Registration No. 200901023978 (867077-X) 23
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