On behalf of the Board of Directors, it is my pleasure to present to you the Titijaya Land Berhad’s Annual Report for the financial year ended 30 June 2018 (“FYE 2018”).
The year 2018 was a challenging year for the Group on the back of uncertainties over the Malaysian economy. Despite the encountered uncertainties, the Group strove to live its mission of building innovative and quality properties at the best locations, delivering projects on time and providing excellent customer service to all our customers. With this opportunity, I wish to commend the Management team and the staff for their dedication and focus in executing the strategies to achieve all of our objectives.
For the financial year ended 30 June 2018, I am pleased to announce that Titijaya has posted RM381 million in revenue, and a profit after tax of RM75 million. A slight decrease in net profit of RM686,440 compared to last year mainly resulted from marketing and promotional expenses incurred during the year for new launches.
ISSUES AND CHALLENGES
The property market has gone through many challenges for the past few years. The rigid lending environment from financial institutions with low loan-to-value ratio offered and stringent requirement for loan approvals have inevitably affected sales. In 2017 itself, the property market outlook was rather bleak with concerns on oversupply of properties, a rise in interest rates, increased cost of living and weaker buying sentiment. These market and economic conditions had led to purchasers employing the wait-and-see stance as opposed to a proactive stance.
From the supply chain perspective, the increase in cost of construction resulting from the increases in cost of production and compliance cost has impacted our business. Although we have locked in our construction costs for existing projects, our future launches will still be subject to prevailing prices and will be determined by the margins.
Despite these challenging market conditions, we are taking precautionary steps in strategizing our launches and products to suit market demand while continuing to deliver on our promise of quality, innovation, reliable products and services. Furthermore, focus on product design, competitive pricing and product differentiation have always been our priority. With this, we are optimistic that we will be able to overcome any challenging property market conditions.
I am pleased to announce that for FYE 2018, the Board has recommended a final single-tier dividend of 0.25 sen per ordinary share to be approved by shareholders’ approval at the forthcoming Annual General Meeting.
The Board maintains a strong leadership through sound governance and ethical business conduct. We believe in achieving responsible commercial success while balancing the interest of our stakeholders, as we fervently uphold sustainability practices in our business.
In conjunction with the latest release of Corporate Governance Guide (3rd edition) by Bursa Malaysia Securities, the Board recognised the importance of practising high standards of corporate governance throughout the Group in order to protect shareholders value as well as financial performance. During the financial year, the Board has established a Board Risk Management Committee to enhance the existing risk framework.
For a more in-depth narrative, kindly refer to the Corporate Governance Statement included on page 50 to 62 of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
The Board acknowledges the importance of Corporate Social Responsibility (“CSR”) and is committed to integrate CSR practices into our day-to-day business operations such as supporting and improving the society at large in which we are present. With this in mind, we have rolled out CSR initiatives in the areas of community, environment and the workplace, with the sole objective of creating sustainable value for all our stakeholders.
It is our belief that goodwill begins at home as a happy workplace produces more productive personnel. That is why the Group does not only provide on-the-job trainings such as Sales & Service Tax (“SST”) training, safety & health training, sustainability reporting training and social media training to ensure our personnel are equipped with the necessary knowledge and skill sets to be able to perform their jobs more efficiently and effectively. Aside from this, we had also hosted company dinners and other recreational activities such as bowling tournaments to encourage bonding of personnel across-the-board.
Our CSR initiatives also align with United Nation’s 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs). SDG 6, Clean Water and Sanitation, SDG 2 Zero Hunger are part of our key SDGs that reflects in our CSR initiatives. The company regularly undertakes projects in schools that need assistance, because we believe that proper infrastructure is a necessity for the younger generation to receive quality education. One example of our efforts was in Sekolah Taman Bukit Maluri, where Titijaya constructed 1 block of hygiene facilities for students. Clogged sewer lines and septic tanks were also cleared, while floor tiles that have been damaged were replaced with new ones. Besides that, Titijaya also regularly organizes meal programmes such as the one for Sekolah Jenis Kebangsaan (C) Pandamaran ‘B’. The programme supplies well-balanced daily meals, nourishing students with better nutrition and health which in turn helps them perform better in their studies.
At the work place, we have also adopted several practices to conserve the environment. Our employees are encouraged to practice reducing energy consumption by switching off the lights when leaving the room or premises, minimising waste by going paperless when possible, and using more environmentally-friendly batteries and cleaning detergents.
We will continue to constantly challenge ourselves to improve the efficiency and effectiveness of our resource utilisation.
OUTLOOK AND FUTURE PROSPECTS
The Malaysian economy is expected to grow at a moderate pace this year as well as the next year after recording a strong rebound last year. According to the World Bank in its Global Economic Prospects 2018 report, it had projected Malaysia’s economic growth to grow to 5.4% in 2018 and slow down to 5.1% and 4.8% in 2019 and 2020 respectively.
Despite the favourable outlook, we anticipate that sentiment in the property market to remain lacklustre this year due to more transparent credit scoring by banks, lower financing margins as well as overhang in property supply.
Nevertheless, we are optimistic that the combination of important factors such as the high quality of our products and launches, the competitive pricing, product differentiation, and strategic locations of our properties will help us to remain resilient in this tough and arduous operating environment.
Moving forward, we are confident of our future financial performance given that most of our land banks are located in prime growth areas. Not only that, we are looking into strategic partnership with potential industry key players for market expansion and knowledge transfer.
On behalf of the Board of Directors, I wish to extend our gratitude to the Management and employees for dedicating their passion, professionalism and hard work towards another substantial year of progress for Titijaya Land Berhad. To our esteemed stakeholders comprising our shareholders, valued customers, regulators and government authorities, business partners and bankers, we thank you for your continuous and unwavering support to Titijaya. I believe the Group is well positioned to continue growing the business for the long-term and achieve greater successes in the years ahead.
Laksamana Tan Sri Dato’ Setia Mohd Anwar Bin Hj Mohd Nor (Retired)