THE YEAR IN REVIEW
2014 was indeed a challenging year for the Group, exacerbated by factors affecting the local and international front. The Group was affected by the declining number of tourists especially from China into Kuala Lumpur International Airport (“KLIA”), Malaysia, after the unprecedented disappearance of the Malaysia Airline Flight MH370 and MH17 which was shot down over the Ukraine aerospace. Towards the end of the year, the floods, which had hit the East Coast of Malaysia was recorded as the worse flood to occur in Malaysia since 1971. This had affected the operations of our hydro power plant in Kelantan primarily.
Operational issues also remained a challenge, primarily for the Energy Sector, which had to overcome several obstacles. Nevertheless, being part of a bigger Group with diversified businesses, the other Sectors’ performance, namely the Food and Beverage (“F&B”) and Tourism Sector as well as the Manufacturing Sector, improved its revenue contribution to the Group year on year (“y-o-y”). The Manufacturing Sector’s improvement in revenue is primarily due to the new business venture in the energy efficiency products (mainly LED products).
For the year under review, Fiscal Year 2014 (“FY 2014”), the Group recorded a Net Loss of RM8.81 million on the back of RM71.75 million revenue compared to a Net Loss of RM6.65 million on the back of RM91.63 million revenue FY 2013.
The main reason for the unfavourable performance recorded by the Group was due to the lower generation by the Energy Sector by its power plants, namely the Libaran Power Station (“Libaran Plant”) in Sandakan. Its other plant, the Sungai Kenerong Hydroelectric Power Station (“Sungai Kenerong Plant”) also had to shut down its operations due to the unprecedented floods that occurred in the East Coast of Malaysia.
Faced with various operational challenges in the Energy Sector’s two power plants namely the Libaran and Sungai Kenerong Plant, the Sector reported lower revenue during the year under review. The Sungai Kenerong Plant had been further affected by the major flood situation in Kelantan which had totally disrupted the operations of the plant.
The F&B and Tourism Sector had continued to positively contribute to the Group in FY 2014 mainly by the increase in revenue by the Tourism segment by 9%. This was contributed by the increase in average ticket sales per visitor as well as the increase in number of visitors y-o-y.
The Manufacturing Sector recorded RM 25.02 million revenue, an increase of 11% from the previous year. The increase was mainly the result of higher LED product sales compared to the previous year.
The Group ended one challenging year only to face another challenging year ahead where the Group is looking at a year of moderate growth, less accommodating monetary policies, volatility in the foreign exchange environment and the implementation of the Goods and Service Tax (“GST”) which will affect the existing businesses of the Group. In addition, the Group will have to tackle the operational challenges faced by its Energy Sector. Nevertheless, the Group is cognisant of these challenges and will hold steadfast to the strategies to carry the Group through the year ahead.
One of the key focus for the year will be to review the Group’s Strategies, setting the tone from the top. The Group has chartered renewed strategies to push the Group forward, one of which is to strengthen the Groups’ foundation and core businesses in this challenging environment. This will see the Group strengthening its balance sheet and cash flow position as well as venturing into businesses along the value chain.
Strategic change or refinement requires investment tasks to allocate resources to be able to compete effectively in today’s environment. The Group needs to balance between current and future returns with great care optimising both, without imperilling the other.
The Group has or will have to take decisive steps to free up capital and operational resources and therefore, for the time being, securing longer term future means that our current financial performance may remain constrained.
Within the operating subsidiaries of the Group, the power generation business will remain to be an important pillar for the development of the nation. Therefore, the Group’s two power plants will continue operating to its best ability to support the requirements of a sustainable electricity supply while pursuing new opportunities. With the years of experience in operating and maintaining the power plants particularly the green energy small hydro plant, there are several opportunities to be explored by the Group.
F&B and Tourism Sector is expected to continue to contribute positively to the performance of the Group in 2015. Eden Catering segment will have a new dimension in its operation with its own operations based in the Persatuan Alumni Universiti Malaya’s Clubhouse which offers banquet, seminar and meeting facilities.
The Tourism segment is expected to provide management and consultancy services to an overseas joint development company by virtue of its experience in managing a successful aquarium as well as its successful breeding, research and development projects for penguins. The Tourism Segment will also be looking at capitalising on its main focus of attraction – “Penguins in Langkawi” and will work closely with the local tourism board to promote and expand its product offerings and value propositions.
For the Manufacturing Sector, despite the local demand for low voltage switchgear items remaining lacklustre, the market share of the company remained largely intact. This was the result of strong trade channel links which the company has built over the years. These links continue to magnify the marketing efforts of the company.
CORPORATE SOCIAL RESPONSIBILITY
Guided by our values, we continue to contribute to the community. The Group’s involvement has always been focused on the less fortunate children. This year was no different, as the Group organised a get together with the less fortunate children in Penang and Langkawi. A special wish was granted by Underwater World Langkawi to a seven year old boy with acute lymphoblastic leukemia when he was given the opportunity to visit the aquarium. The Group will continuously support the children, as they will be, our future.
Eden Inc. Berhad is a company that has been built on the experiences, hard work and commitment of its people. It has always been an honour to serve as the Company’s Executive Chairman and to work alongside my dedicated team.
I would like to express my deepest gratitude to my fellow Board Members who have contributed greatly to the Group via their invaluable experience.
On the Board’s behalf, I would also like to thank the management and staff of EDEN, for the endless dedication of the team. To our other stakeholders, our customers, bankers, associates from the government and private sectors as well as our loyal shareholders, I thank you for all the support that you have given to EDEN.