Admiral Tan Sri Dato’ Setia Mohd Anwar
bin Hj Mohd Nor (Retired)
Independent Non-Executive Director
On behalf of the Board of Directors, it is my privilege to present to you the Annual Report and Audited Financial Statements of Titijaya Land Berhad (“Titijaya” or “the Group”) for the financial year ended June 30, 2021 (“FYE2021”).
An Unprecedented Year Like No Other
The year 2021 will always be a talking point for many in the future, a year unlike any other, as the unprecedented perfect storm took its place with the combination of the outbreak of COVID-19 pandemic, major geopolitical events, US Presidential Elections, and US-China trade war. These strings of events have brought about major disruptions to the global economy and financial markets, affecting the businesses and lives of many.
The International Monetary Fund has projected the global economy to recover by 6.0% in 2021 and normalises to 4.9% in 2022 after recording an appalling 3.2% drop in 2020. Despite the optimism for the recovery in the global economy, the pace of the country’s recovery traction will be different relative to the speed of vaccine rollout and policy supports dished out. The growth prospects for the emerging and developing market have also been marked down on the back of prolonged COVID-19 containment measures in comparison to the developed economies, where growth will be supported by the manufacturing and services sectors, facilitated by the robust healthcare system and higher inoculation rates.
For Malaysia, the Gross Domestic Product (“GDP”) fell to a two-decade low of -5.6% for the year of 2020, no thanks to the broad-based weaknesses in external demand, production and domestic demand, weakened labour market conditions, constricted economic and business activities weighed by various phases of movement restrictions imposed to curb the spread of the COVID-19 pandemic.
The property development and construction activities were also restricted during the movement control orders period in January and June 2021 which had impacted the Group’s earnings performance for the second half of FYE2021. The Group continues to be forward-looking and take proactive measures to chart long-term growth strategy to capitalise on the upswing of the economy once the new normalcy kicks in.
Amidst the challenging operating environment throughout the year, the Group managed to sustain its value to its stakeholders, and is adapting to the changes by innovating to stay relevant in these ever-changing times. We remain confident that our Group will be able to ride through this crisis, emerging stronger like we always do through every crisis since our inception, to continue to steer towards a sustainable future.
INDUSTRY ISSUES AND CHALLENGES
Recovery is Forthcoming with Supportive Policy Measures
Closer to home, certain industries will be able to rebound and recover, while some will require some time to recover to the pre-pandemic level. The outlook will continue to hinge on the developments of the COVID-19 pandemic, continued policy support from the government, labour market conditions, and the recovery of the external and domestic demand.
The property market is expected to remain soft notwithstanding the improved overhang and unsold situation in 2020 where the overhang units dropped 3.6% to 29,565 units as compared to 2019. In an effort to invigorate the property market, the government has reintroduced the Housing Ownership Campaign (HOC), which had helped buoy the property market in 2019 for home buyers to benefit from exemptions of stamp duty. Other initiatives which are expected to enhance the affordability of prospective property buyers and cushion the impact of COVID-19 to the property sector are the removal of the 70% margin of financing limit for third housing loan onwards, Real Property Gain Tax (“RPGT”) exemptions, Stamp Duty reliefs, and Rent-To-Own schemes.
In addition, the Monetary Policy Committee (MPC) has maintained the Overnight Policy Rate (OPR) at 1.75% at the May and July 2021 MPC meetings, to cushion the economic impact of the COVID-19 pandemic and help stimulate the economy. This accommodative stance is conducive for the property market as prospective buyers, especially first-time home buyers, will be able to take advantage of the lower interest rates.
From this end, the Group will remain prudent in launching new projects and focus on the completion of the existing projects, at the same time, aims to create urban developments that are attractive, to foster brand loyalty and repeat purchases for past and existing buyers while taking the opportunity to plan for projects to be launched once the property market rebounds.
In view of the macroeconomic headwinds and adverse disruptions brought about by the COVID-19 pandemic, the Board of Directors have decided to remain prudent and not recommend any declaration of dividend for FYE2021 after careful consideration to preserve cash in these tumultuous times.
Light at the End of the Tunnel
The outlook by Bank Negara Malaysia for 2021 was dampened by the resurgence of COVID-19 cases, resulting in the recent revision of Malaysia’s GDP Growth to between 3.0 – 4.0% from 6.0 – 7.0% projected earlier. The revision was necessitated to factor in the business disruptions caused by the re-imposition of the Full Movement Control Order (“MCO”) nationwide effected in June 2021.
Looking forward, the economic recovery will be dependent on the pace of vaccine rollout to achieve the herd immunity status and effectiveness of vaccines against newer variants coupled with supportive monetary and fiscal policies to facilitate the reopening of the economic sectors. Additionally, the domestic economy is expected to be driven by revitalised global trade demand, global tech up cycle, ongoing fiscal and monetary policies to support businesses and households, as well as the continuation of large scale infrastructure projects to spur the economic recovery.
Against these backdrops, the Group remains cautious on the outlook for FYE2022 and continues to remain committed to delivering the highest standard and quality products to the market.
EVER CHANGING COMPLIANCE LANDSCAPE
On the top of the COVIC-19 pandemic challenges, the Group also has adapted, adopted and complied with the ever changing compliances rolled out by the government and authorities. One of the important laws rolled out by the government in recent years is the Malaysian Anti-Corruption Commission Act 2009. The Group has also published the Anti-Bribery and Corruption Policy (“ABCP”) on its website. The Group has embarked on the education and the training of its Board of Directors and the employees of the need to be compliant to the MACC and ABCP.
On behalf of the Board, I wish to express our sincere appreciation to our valued customers, business partners, financiers, and shareholders for your continuous support. I would like to extend my heartfelt appreciation to my fellow Board members for your valuable advice, commitment, and contribution to the Board through these challenging times. On top of that, it is my utmost gratitude to our employees for their dedication and the stakeholders for their support and faith in committing to our Group’s vision and mission.
CHANGE IN BOARD MEMBER
During the year under review, the Group would like to announce the retirement of Tan Sri Dato’ Lim Soon Peng as the Group Managing Director on 31 March 2021, (“Tan Sri Dato’ Lim”) being in the forefront of stewardship to steer the Group to its success today, impacting the lives of many positively. Tan Sri Dato’ Lim will be focusing on philanthropy and elevating the standard of living of people through the work of Titijaya Foundation. On behalf of the Board, Management, and staff, I would like to wish him the best for his future endeavour and thank his invaluable contributions to the Group.
I would also like to warmly welcome Mr. Lim Poh Yit (“Mr Lim”) as our new Group Managing Director, who joined the board on 28 August 2012 and held the role of Deputy Group Managing Director of Titijaya since 31 July 2014. Mr. Lim has been with the Group for more than 17 years, rotating and experiencing various roles from operational and day-to-day management, strategic planning, property development projects, human resources, accounts and finance to oversee the implementation of the Group’s internal policies. I am confident and excited to bring youth to the Group and with his experience, Mr. Lim will further lead and contribute to the success and innovation of the Group in its new transformation plan.
At the same time, we would like to extend a warm welcome to Dato’ Faizal Bin Abdullah as a new Executive Director of the Board, effective 19 April 2021. His immense experience in the corporate advisory sphere would be able to bring forth great strategic addition to the Group’s prowess.
With the new leadership in place, we are confident that Titijaya’s growth trajectory will continue to be sustained, bringing the Group to greater heights.
Admiral Tan Sri Dato’ Setia Mohd Anwar Bin Hj Mohd Nor