ANNUAL REPORT 2023 21 The distribution of the second and final tranche of the Dividend-in-Specie amounting to 14,275,248 Agmo Shares, which consists of the remaining 25,248 Agmo Shares subsequent to the first tranche of Dividend-in-Specie and the release from moratorium of an additional 14,250,000 Agmo Shares, was completed on 27 September 2023 following the distribution of 14,255,806 Agmo Shares to entitled shareholders, with the remaining 19,442 Agmo Shares arising from fractional entitlements to be retained by MYEG Capital as other investments. CAPITAL AND OPERATIONAL EXPENDITURE It is crucial for companies to ensure they are always well-prepared to respond to changes in the business environment and to seize emerging opportunities that offer promising growth prospects by bringing disruptive solutions to the marketplace. For digital service providers like MYEG this means investing in the key elements needed to stay one step ahead, including in the development of software and technological capabilities as well as purchase of hardware and other physical assets. As such, MYEG has placed significant consideration towards finding optimal balance in its capital expenditure (“CAPEX”). The strategy remains focused on unlocking further business growth and expansion, while also remaining cognisant of the importance of rewarding shareholders and conserving adequate capital for immediate needs. Efforts to manage and ensure efficiency of operational expenditure (“OPEX”) were also prioritised. In FY2023, MYEG recorded CAPEX of RM474.12 million, 11.14% lower year-on-year (FY2022: RM533.53 million), while OPEX stood at RM250.64 million, 12.8% lower year-on-year (FY2022: RM287.48 million). The CAPEX and OPEX recorded in FY2023 were for the following areas: CAPEX OPEX Ź Development of technology including blockchain platform and related applications; Ź e-Government services related modules; Ź Office and IT equipment; and Ź Foreign workers hostel. Ź Personnel-related expenses and OPEX; Ź Advertising and promotion expenses; Ź Maintenance and OPEX for MYEG’s building (“MYEG Tower”); and Ź Depreciation and amortisation charges. MYEG management will continue to closely monitor these important levers to ensure prudence in handling the CAPEX for the upcoming financial years. ASSETS AND LIABILITIES, CASH AND BANK BORROWINGS MYEG’s balance sheet remained resilient, with total cash and bank balances as at 31 December 2023 improving by 7.11% to RM84.14 million. This is an improvement from its previous year’s position (FY2022: RM76.42 million), reflecting an improved liquidity position. This has allowed the Group to access potential investment opportunities and better navigate market challenges. Total borrowings from term loans, IMTN, block discounting and revolving credits were manageable despite recording a higher figure at RM846.66 million for FY2023 (FY2022: RM443.06 million). MYEG maintains a manageable debt-toequity ratio of 0.38 times (FY2022: 0.22 times). On total assets, both current and non-current assets contributed to an increase in MYEG’s total assets position at RM3.22 billion, 26.77% higher year-on-year (FY2022: RM2.54 billion). Property, plant and equipment was 7.75% lower than a year ago at RM304.44 million (FY2022: RM330.01 million). Trade receivables also increased by 1.84% to RM341.03 million (FY2022: RM334.86 million). Development costs registered a significant increase to RM1.21 billion (FY2022: RM762.68 million). The Group is on track to further expand its business growth, particularly in the blockchain segment, supported by its strong cashflow position. The Group could further leverage on external borrowings if required, given its steady debt equity ratio. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d) PERFORMANCE
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