MATTERS MATERIAL TO VALUE CREATION SUPPLY CHAIN DISRUPTIONS AND AVAILABILITY OF MATERIALS AND RISING COSTS For the better part of FY2023, the world continued to face supply chain disruptions brought on by various developments. Among these were the protracted Russia-Ukraine conflict, strict, zero-COVID lockdowns imposed across China and continued trade wars and geopolitical tensions between the US and China. As the COVID-19 pandemic receded into endemicity, countries worldwide looked to restart their economies. This led to a surge in demand for goods, services, commodities and building materials. Cumulatively, this too contributed to supply chain shocks and resulted in supply unable to maintain pace with fast recovering demand. The cumulative effect of the aforementioned developments (as well as others) contributed to escalating costs for a wide range of building materials such as steel and cement. Rising material costs contributed to increased operating costs in FY2023 which led to the challenge of either raising selling prices of properties or to reduce overall earnings margins. BUILDING MATERIALS COST INDEX Cement Mar 2022: 107.5 Feb 2023 : 117.1 Mar 2023: 118.4 YoY% : 10.2 MoM% : 1.1 Bricks & Wall Mar 2022: 110.3 Feb 2023 : 117.9 Mar 2023: 119.1 YoY% : 8.0 MoM% : 1.0 Steel Mar 2022: 134.7 Feb 2023 : 132.8 Mar 2023: 133.9 YoY% : 0.6 MoM% : 0.9 Steel & Metal Sections Mar 2022: 132.3 Feb 2023 : 132.6 Mar 2023: 133.9 YoY% : 1.2 MoM% : 0.9 UNIT PRICE INDEX FOR SELECTED BUILDING MATERIALS, MALAYSIA, MARCH 2023 The price index per unit of cement and steel recorded an increase of 1.1 per cent and 0.9 per cent in March 2023 Sand RM / Metric Ton RM42.74 YoY% : 18.3 MoM%: 1.7 Note:- 1. The average price of building materials refers to the average price of building materials that are available in the selected outlets 2. YoY (change year-on-year) and MoM (change month-on-month) 3. Sourced from Department of Statistics Malaysia Mild Steel Round Bars RM / Metric Ton RM3,774.78 YoY% : 1.1 MoM%: 0.8 Ordinary Portland Cement RM / 50kg bag RM22.40 YoY% : 11.2 MoM%: 1.1 Aggregates RM / Metric Ton RM42.31 YoY% : 5.6 MoM%: 0.2 Mycon 60 High Tensile Deformed Bars RM / Metric Ton RM3,600.24 YoY% : 1.0 MoM%: 0.8 AVERAGE PRICE OF SELECTED BUILDING MATERIALS, MALAYSIA, MARCH 2023 The average price of cement (Ordinary Portland) recorded an increase of 1.1 per cent in March 2023 INTEGRATED ANNUAL REPORT 2023 MATRIX CONCEPTS HOLDINGS BERHAD 79
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