Basic HTML Version
Annual Report 2013
• 22 •
In tandem with higher revenue recorded in FYE 2013, trade receivables have increased notably by RM30.1 million as compared
to the preceding year. As a result of increase revenue, the corresponding higher purchases led to an increase in the Group’s
inventories and trade payables by RM4.5 million and RM6.8 million respectively.
Although bank borrowings recorded an increase of RM6.8 million over the preceding year, the Group maintains its low gearing
of 0.06 times (FYE 2012: 0.04 times). The Group’s expansion plan of its steel fabrication division at Lot 777, Block 5, Muara Tebas
Land District, Kuching, Sarawak, to undertake larger and more complex heavy structural steel fabrication jobs for the oil and gas
sector had contributed to an increase in the finance leases obligations for financing the purchase of new heavy machineries and
equipments.
PROSPECTS AND OUTLOOK
The Group’s diversified portfolio provides a resilient platform to navigate the global economic uncertainties. Over the years, we
have broadened and deepened our expertise and this has prepared us to take on bigger challenges. The Group is well-geared to
expand further into the oil and gas fabrication activities with readiness of our strategic fabrication yard at Lot 777, Block 5, Jalan
Bako, Muara Tebas Land District, Kuching, Sarawak, equipped with five (5) covered workshops and load-out jetties fronting the
Sarawak River.
KKB Group continues to explore all opportunities available in our specialized and growing structural steel engineering services
with more focus to be given to the Energy related projects and a long-term objective to participate in the Oil and Gas industry
with strategic partner(s).
We believe both our Engineering and Manufacturing Sector are well poised in our niche industries – Civil Construction with Steel
Fabrication, as well as our synergistic steel pipe manufacturing divisions operating both in Sarawak and Sabah.
Being a market leader and quality producer of LPG Cylinders since 1994, we are confident that KKB will continue to service and
supply LPG Cylinders to key players especially Petronas Dagangan Berhad and other oil companies like MyGas Sdn Bhd, whilst
managing the volatilities in steel raw material cost remained a challenge.
KKB Group remained positive that many opportunities will present itself, be it from the Sarawak Corridor of Renewable Energy
(“Score”) or Non-Score related projects, as the Federal and State Governments are committed to ensure continuous social and
economic developments in the Energy, Infrastructures, Water and Tele-Communications sectors etc throughout the State of
Sarawak and Sabah.
Year 2014 will be challenging amidst the tough operating environment and stiff competition within the industry. The Group
continues to exercise prudence in our strategies and operations and barring any unforeseen circumstances, the Group remained
focused and optimistic to perform favourably towards a sustainable growth for the financial year ending 2014.
MANAGEMENT’S DISCUSSION & ANALYSIS (MD&A) (CONT’D)