29 ANNUAL REPORT 2024 MST GOLF GROUP BERHAD MANAGEMENT DISCUSSION & ANALYSIS OVERVIEW In 2024, MST Golf navigated a challenging year with many adversities such as inflationary and rising cost of living, weak retail activity, and foreign currency fluctuations. Across all markets, heightened pressure on consumer demand created difficult retail conditions, especially in Singapore, requiring increased promotional and marketing efforts to sustain sales momentum. The Group reported a total revenue of RM327.78 million for the financial year ended 31 December 2024, a marginal increase of 0.7% compared to the previous financial year. Recognising the weak retail environment and lower consumer spending in 2024, the Group focused on increasing the products’ average selling price in retail. In tandem, efforts were made to reduce stock levels, successfully balancing inventory to RM165.75 million, which reduced by 5% (excluding inventory for our new operations in Indonesia amounting to RM32.16 million [2023: RM9.66 million]). While the inventory reduction in 2024 was beneficial, it impacted gross profit margins. The overall gross profit margin decreased by 3.1%, mainly due to promotional and marketing activities and provision for slow-moving inventories. Operating expenses, including administrative, selling and distribution costs, increased by 7.22%. The increase is mainly attributed to RM12.93 million in operating expenses from Indonesian operations. Excluding Indonesia, operating expenses remained stable at RM108.70 million compared to the normalised RM108.74 million in FY2023, reflecting the Group’s continued cost-optimisation efforts. The Group reported a profit after tax of RM4.82 million, a 72.3% decline from FY2023. The decline was primarily due to lower sales, reduced margins, and start-up costs in Indonesia. Revenue RM327.78 mil Group Revenue (RM'000) 2024 0 100,000 200,000 300,000 400,000 327,775 325,431 300,875 206,519 170,260 2023 2022 2021 2020 2020 2021 2022 2023 2024 200,000 45.00% 43.90% 42.90% 40.70% 40.80% 40.87% 44.00% 43.00% 42.00% 41.00% 40.00% 39.00% Gross Profit GP% 150,000 100,000 50,000 0
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