CAPITAL AND OPERATIONAL EXPENDITURE Capital expenditure (“CAPEX”) management was important in maintaining the pursuit of key growth opportunities, with management continuing to observe prudence in handling CAPEX for the financial year. The strategy remains focused on balancing investments to unlock further business growth and expansion, while also remaining cognisant of the importance of rewarding shareholders and conserving adequate capital for current needs. Efforts to manage and ensure efficiency of operational expenditure (“OPEX”) were also prioritised. In FY2022, MYEG recorded CAPEX of RM533.53 million, 90.4% higher year-on-year (FY2021: RM280.23 million), while OPEX stood at RM287.48 million, 27.6% lower year-on-year (FY2021: RM397.29 million). CAPEX and OPEX incurred in FY2022 were for the following: CAPEX OPEX Development of technology including blockchain platform and related applications; Medical equipment; e-Government services related modules; Office and IT equipment; and Foreign workers hostel. Personnel-related expenses and OPEX; Advertising and promotion expenses; Maintenance and OPEX for MYEG’s building (“MYEG Tower”); and Depreciation and amortisation charges. ASSETS AND LIABILITIES, CASH AND BANK BORROWINGS The Group’s assets continued to outweigh its liabilities. Both current and non-current assets contributed to an increase in MYEG’s total asset position at RM2.54 billion, 34.8% higher year-on-year (FY2021: RM1.88 billion). Property and equipment had increased by 9.7% to RM330.01 million (FY2021: RM300.72 million). Trade receivables also increased by 15.2% to RM334.86 million (FY2021: RM290.78 million). Development costs more than doubled to RM762.68 million (FY2021: RM322.52 million). The Group’s cash and bank balances as at 31 December 2022 decreased 23.1% to RM56.68 million (FY2021: RM73.70mil). While the year saw increased cash generated from operations and fund raising exercises, the Group also intensified capital deployed for future business growth opportunities in areas such as blockchain. MYEG continued to possess sufficient cash to meet working capital requirements. MYEG’s total borrowings consisting of current and non-current secured loans arising from term loans, as well as unsecured loans comprising revolving credit, was higher at RM443.06 million for FY2022 (FY2021: RM160.55 million). MYEG continued to maintain a healthy debt-to-equity ratio of 0.22 times (FY2021: 0.05 times). HIGHLIGHTS AND ACHIEVEMENTS The lifting of travel restrictions and labour migration in FY2022 served to further strengthen MYEG’s immigrationrelated services such as the foreign worker job matching service. The recruitment business saw solid demand, given that many employers resumed hiring foreign workers again to fill urgent vacancies following the reopening of borders. The MyStay foreign worker accommodation programme in FY2022 saw existing facilities in Selangor and Melaka continue to achieve full occupancy rate. Notably, further progress was made in the purchase of land as well as in the submission and securing of requisite approvals from the relevant authorities for the upcoming development projects. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d) 22
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