For the financial year ended 30 June 2007, the Group achieved a revenue of RM411.71 million as compared to RM 356.71 for the previous year, an improvement of 15.4 %. Revenue increase was, for the most part, because of higher container volumes shipped at better selling prices from our Vietnam factories. Although revenue was the highest so far, the Group only managed a profit before
taxation of RM 9.19 million as compared to RM 19.39 million in 2006.
What had emerged clearly from the results were:
• The high cost of raw materials resulting from the shortage of supply of rubber-wood and the increasing oil price, which resulted in higher energy cost and higher oil related materials such as coating and packing materials, have pushed up our production and operating costs. The management is reviewing new sales contracts with the view of passing part of such cost to our buyers.
• The weakening of the US dollar against the Malaysian Ringgit has affected the Group’s results as mostly all our sales are denominated in US dollar. Hedging against US dollar will continue while efforts will be made to revise the selling prices of certain products.
• The cost of rationalisation of the operating factories in Malaysia, by closing down the factory in Ijok and merging it into one of the existing factory in Klang. It was a pro-active step taken by the management, which we believe will bring a long-term gain to the Group.
• The long learning curve and shortage of skilled labour have affected the margins at the Thailand factory. Despite all the above, the regional expansion into Vietnam has enabled the Group, as a whole, to remain profi table. During the year, the factories in Vietnam have achieved 85 % production utilisation rate out of the full capacity. Vietnam operations have rewarded the Group with a sterling set of results – profit before taxation of RM 22.48 million for the year.