from low 90 per cent to respected yield rate above 98 per cent. Cycle time improved from below 60 per cent to commendable rate above 80 per cent and on track to achieve best in class rate expected in the market. At the same time, we recognised that by having a large number of products and customer base in the past, the throughput has resulted in production inefficiencies which also increased wastage during production runs. Better business focus by aligning products mainly on the core products and technology with selected strong customer base via product pruning help improved in cost and production efficiencies through better economies of scale and less product changeover with much lesser wastage during production runs. Meanwhile, our Energy Division had to contend with factors such as the weakening of the pound sterling, supply of spare parts and a dearth of human capital. Since 50 per cent of our costs have to be paid in British pounds and 100 per cent of our revenue is in US dollars, we have incorporated a hedging strategy to stockpile pound sterling when the exchange rate is favourable in order to mitigate against fluctuating rates in future. We have also established a retention and succession plan strategy to ensure core talents continue to dedicate themselves to the Company. By reducing attrition, sustainable knowledge base with lean operation can be realised while minimise the operational costs incurred in the training and development of new staff, which serves to maintain our cost of operations at below the industry standard. We have further deployed strategies to minimise our cost of acquiring physical assets, such as via Ping’s purchase of a used but highly functional FPSO, which saved us millions of dollars in procurement expenses. LOOKING FORWARD There are plenty of reasons to be optimistic about our continuing ascendance in the coming years. While we do not in any way condone acts of war, the ban on Russian oil exports by the European Union is likely to continue inflating crude oil prices. This will benefit Ping in the form of higher profit margins, as we boast a low cost of operations of less than USD30 per barrel of crude oil. With our Avalon oil field on track to commence operations in the next few years, there is plenty of potential for growth in the oil sector. However, we are also cognisant of the need to balance our portfolio with renewable energy to enhance our long-term prospects, and have plans to expand our commitments in that sector on the back of our engagement with Cerulean Winds. We are also in a prime position to seize opportunities in the fast-growing semiconductor industry, especially if the plan of 12-inch wafer fabricating facility with Foxconn and the semiconductor R&D centre materialises. This is an important step forward not just for the DNeX Group, but also for the nation as we will be hiring a large base of engineers and have the opportunity to future-proof Malaysia’s reputation on the international stage as a cutting-edge electronics manufacturing player. The Group will continue to be on the lookout for new opportunities in the technology sector, with a staunch focus on ensuring our initiatives are targeted towards innovative products and services that are trending upwards, as opposed to sunset products. Our partnerships with Accenture and Ajlan have placed us on the right trajectory to achieve this objective, and will further serve to open doors to new opportunities both in Malaysia as well as in the Middle East. With all these initiatives in place and many others in the pipeline, we are confident of growing our revenue based on said plans. This is an exciting period for DNeX. Now that we have spent the last year ensuring our financial fundamentals are in place, we are in an enviable financial position to continue expanding and evolving as we seek to fulfil the interests of all our stakeholders. 69 DNeX INTEGRATED REPORT 2022
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