The Group’s agriculture division saw higher revenue figures as there were higher sales of teak logs. There was destruction in the work flow due to the Movement Control Order (“MCO”) implemented throughout the year. Revenue came in at RM2.2 million which is RM1.3 million higher than the RM0.9 million recorded in the preceding year. Corporate Developments During the year, we took the initiative to consolidate our resources and divested our group’s stock broking business in March. We also decided to close our retail business in Singapore and Bangkok as the deterioration in consumer spending due to the COVID-19 pandemic affected our retail business severely and disrupted our expansion plans throughout South East Asia. In addition, our 54.19% owned subsidiary Furniweb Holdings Limited (“FHL”) has completed the acquisition of 37.25% stake in Energy Solution Global Limited (“ESGL”) group of companies in December 2021. ESGL has built up a strong reputation as a smart energy solution provider in Singapore and Malaysia, countries where climate change mitigation policies are shaping up, particularly in the area of energy efficiency. As such the Group foresee a big opportunity in this emerging green economy and has identified a company with excellent engineering expertise that can spearhead its strategy to position the Group competitively in this region. The Board has identified smart energy saving solution business as a new business segment to enable the Group to diversify its revenue sources and provide an additional stream of income. The Board believes by entering into the energy efficiency market, it shall enhance the Group’s future prospects and in line with the Group’s strategy of achieving sustainable growth. Outlook The global economy was anticipated to have a brisk recovery in year 2022 amid signs the Omicron coronavirus variant was having less of an impact, but the Russia-Ukraine crisis has rapidly emerged as a risk to supply chains and is likely to accelerate cost pressures. The sanctions against Russia in response to the invasion of Ukraine have jolted markets and boosted oil prices, adding to already high inflation and supply-chain disruptions. The property market in Malaysia remains challenging with issues such as affordability, slower economic growth, high levels of unsold units as well as the property supply-demand imbalance. Fear over the impact of the COVID-19 pandemic on the economy slowdown and oversupply situation is also delaying big-ticket item purchases as consumers take a wait-and-see approach. The Group will continue its focus on affordable property projects and believe that the affordable properties will be in demand especially in the prime areas of Selangor and Kuala Lumpur. The recent MCO also affected the logging operations. Despite the market uncertainty brought by the COVID-19 pandemic, the Group will endeavor to finalise and secure P R G H O L D I N G S B E R H A D A N N U A L R E P O R T 2 0 2 1 12 Chairman’s Statement (cont’d)
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