DESTINI AR 2017

Strategic Planning In mitigating uncertainties in the diversified markets the Group operates in, Destini has laid out several survival and growth strategies across all of its business segment to remain resilient as early as 2011. This includes diversifying its range of products and services within its core expertise. Destini operates with a niche portfolio of products and services in high entry barriers businesses and there are many more possibilities for Destini to explore and expand its capabilities. Destini also is en route to strengthen its current business with the Government sector particularly in the aviation, transport, marine and oil and gas sectors. These sectors will continue to be the main drivers of the domestic economy. Moving away from local shores, Destini is also constantly looking to extend its products and services to the wider market, internationally. From the current presence which spans from Australia, China, Malaysia, Middle East, Singapore and United Kingdom, Destini will expand its business network to the American region. Besides that, Destini has rationalised its operations to focus on growing its core business. This could be seen through the disposal of its loss making subsidiary, Green Pluslink Sdn Bhd (GPL), for RM4.40 million. GPL is principally involved in the business of extrusion and recycling of waste tyres for the production of carbon black, diesel fuel and scrap metal. Group’s financial performance The result of these strategies enables Destini to show commendable performance from its defence aviation, marine manufacturing and land systems businesses in FY2017 which contributed to the jump in the Group’s revenue by 94.19% to RM688.92 million. The rise in revenue was mainly contributed by the helicopter project, NGPC and OPV projects and also motor trolley supply for Keretapi Tanah Melayu Berhad (KTMB). These successful deliveries certified the Government’s confidence in Destini’s capabilities in delivering quality products and services over the past two decades and their trust in Destini’s future commitments. Despite higher revenue, Destini saw lower profit after tax and non-controlling interest (PATNCI) of RM30.01 million in FY2017 from RM33.03 million the year before. Its lower earnings were due to joint venture arrangements and lower margins from its major projects such as the OPV and helicopters projects. Destini’s lower overall margin was also due to the infancy of several of its subsidiaries that are still in the development of new capabilities for future business which requires substantial financial resources. However, we believe that those are necessary to ensure continued growth of the Group. 40 DESTINI BERHAD by President and Group Chief Executive Officer Management Discussion and Analysis