My EG Services Berhad Annual Report 2020

MY E.G. SERVICES BERHAD Regisration No. 200001003034 (505639-K) 16 MANAGEMENT DISCUSSION AND ANALYSIS REVIEW OF THE MACRO-OPERATING ENVIRONMENT ': QSPWFE UP CF BO VOQSFDFEFOUFE ZFBS XJUI UIF PVUCSFBL PG UIF $07*% QBOEFNJD 5IJT XBT BO FYUSBPSEJOBSZ event that led to a wide range of adverse impacts on the global and national economy. The cumulative impact of the widespread outbreak, imposition of lockdowns and restricted movement controls as well as cessation of business activities across the world brought economic growth to an abrupt halt. Consequently, the global economy contracted significantly in 2020. Consistent with global economic performance, Malaysia’s gross domestic product growth was also negative in 2020. "DDPSEJOH UP PGàDJBM OBUJPOBM TUBUJTUJDT UIF .BMBZTJBO FDPOPNZ DPOUSBDUFE CZ JO 5IF SFTUSJDUJPOT PO NPCJMJUZ FTQFDJBMMZ PO JOUFS EJTUSJDU BOE JOUFS TUBUF USBWFM JNQPTFE VOEFS WBSJPVT DBUFHPSJFT PG UIF .PWFNFOU $POUSPM Order (“ MCO ”) weighed on economic activity across the financial year. Nevertheless, the continued improvement in external demand provided support to growth. Consequently, except for manufacturing, all economic sectors recorded negative growth. At the same time, moderating private consumption and public investment activities weighed on domestic demand. $PVOUMFTT JOEVTUSJFT BOE DPNQBOJFT XFSF OPU TQBSFE UIF FGGFDUT PG UIF CMBDL TXBO $07*% FWFOU JO ': Nevertheless, MYEG continued to remain resilient and diligently navigated these unexpected operational challenges to continue running its business operations and cultivating value creation opportunities to the best of its ability, even EVSJOH UIF HPWFSONFOU JNQPTFE .$0 BT NBOZ PG .:&( T TFSWJDFT XFSF SFDPHOJTFE CZ UIF .BMBZTJBO HPWFSONFOU BT being essential services. In particular, the use of digital channels to access a wide range of services are very much consistent with the Malaysian government’s requirements for social distancing and to reduce physical interaction and travelling. Hence, MYEG during this most critical and disruptive period, has continued to deliver value and to support the Malaysian government’s call of adapting and adjusting to the new normal scenario. As the country’s leading digital services company, MYEG has continued to play a pivotal role in the delivery of essential services to the public as well as to the business community. We have continued to serve and deliver value during this pandemic period, which further attests to the strength and flexibility of our business model and the key strategic role we play within Malaysia and other operating markets. Similarly, in the overseas markets in which MYEG operates in, the Group was also able, to a large extent, continue offering its digital concession (government) and commercial services. TURNING CRISIS INTO OPPORTUNITY Despite the many difficulties posed during the financial year, MYEG’s existing business model has propelled the Group to respond effectively to the operating environment. While the virus pandemic had caused logistical challenges to operations due to the imposition of movement restrictions and the requirement for new SOPs, MYEG successfully adapted to the scenario by turning the challenges faced into opportunities for process improvement and to drive business growth. *O NBOZ XBZT .:&( T CVTJOFTT NPEFM XBT XFMM QSJNFE UP NFFU UIF WBSJPVT DIBMMFOHFT CSPVHIU PO CZ $07*% Our business model which leverages on digital channels to provide a wide range of concession and commercial services, was inherently well placed to drive contactless transactions in support of SOP compliance and social distancing requirements. It dovetailed with users’ changing preferences to use virtual channels for their needs, given increasing concerns of infection risks from physical engagement or transactions. Furthermore, the Group’s business model and its technological capabilities have enabled MYEG to launch a wide SBOHF PG NVDI OFFEFE QBOEFNJD PS IFBMUIDBSF SFMBUFE TFSWJDFT In essence, MYEG in FY2020, did not just mitigate against risks and threats arising from the external operating environment, but also grasped emerging opportunities to drive business growth.