Drb-hicom Bhd. · MYX:DRBHCOM
Drb-hicom Bhd — Shareholder Meeting (May 2024)
34 slides from Drb-hicom Bhd's shareholder meeting presentation, May 2024
Slide 1: Aminah Othman, Group Chief Executive Officer
AMINAH OTHMAN GROUP CHIEF EXECUTIVE OFFICER
Slide 2: Operational and Financial Matters: Question 1
Operational and Financial Matters Question 1 : The Malaysia Automotive Association anticipates a TIV of 740,000 units in 2024, a 7.47% reduction from 2023. It attributes this to a slowdown in consumer spending due to concerns over targeted subsidy rationalisation, high cost of living, proposed High
Slide 3: Operational and Financial Matters: Answer (1a)
Operational and Financial Matters Answer (1a) : Despite a lower projection for TIV 2024, the Malaysian Automotive Association (“MAA”) reported an 8% increase in new vehicle sales, with 260,236 units in the first four months of 2024, from 240,417 units during the same period last year. DRB-HICOM Grou
Slide 4: Operational and Financial Matters: Question (1b)
Operational and Financial Matters Question (1b) : PROTON’s partnership with smart Automobile Co., Ltd. to distribute the smart EV models in Malaysia and Thailand (page 20 of AR2023), how many smart EV does the Group target to distribute in FY2024? 4
Slide 5: Operational and Financial Matters: Answer (1b)
Operational and Financial Matters Answer (1b) : The sales target for smart EV in FY2024 is 1,000 units. 5
Slide 6: Operational and Financial Matters: Question 2
Operational and Financial Matters Question 2 : Pos Aviation Sdn. Bhd. (“Pos Aviation”) secured contract with Malaysia Airlines to provide in- flight catering for the Australia-New Zealand route (page 59 of AR2023) a) What is the value and duration of the contract to provide the said in-flight cateri
Slide 7: Operational and Financial Matters: Answer (2a)
Operational and Financial Matters Answer (2a) : The contract with Malaysia Airlines for the ANZ sector is signed for two years, with a contract value of approximately RM40 million. 7
Slide 8: Operational and Financial Matters: Question (2b)
Operational and Financial Matters Question (2b) : What are the Group’s plans in terms of securing more contracts from Malaysia Airlines? To what extent will Pos Aviation be able to secure more contracts from Malaysia Airlines to provide in-flight catering for other routes? 8
Slide 9: Operational and Financial Matters: Answer (2b)
Operational and Financial Matters Answer (2b) : Pos Aviation expanded its kitchen space to increase meal handling capacity for Malaysia Airlines, which currently accounts for about 65% of its inflight catering volume. With this expansion, new equipment, and process automation, we expect to secure mo
Slide 10: Operational and Financial Matters: Question 3
Operational and Financial Matters Question 3 : The sustainability endeavours of World Cargo Airline Sdn. Bhd. (“WCA”) is phasing out older aircrafts and bringing in more new-generation aircrafts which are up to 20% more fuel efficient with less carbon emissions (page 60 of AR2023) a) What is the tot
Slide 11: Operational and Financial Matters: Answer (3a)
Operational and Financial Matters Answer (3a) : WCA phased out two of its older B733 and B734 in the fourth quarter of 2023. 11
Slide 12: Operational and Financial Matters: Question (3b)
Operational and Financial Matters Question (3b) : How many new-generation aircraft does WCA plan to bring in to replace the older aircraft? What is the total value of the new-generation aircraft? 12
Slide 13: Operational and Financial Matters: Answer (3b)
Operational and Financial Matters Answer (3b) : WCA replaced the older aircrafts with two additional B737-800 new generation units, each valued at approximately USD 30 million. 13
Slide 14: Operational and Financial Matters: Question (3c)
Operational and Financial Matters Question (3c) : Given that WCA is an associated company of DRB-HICOM, to what extent does the Group need to invest further in WCA to purchase new-generation aircraft? 14
Slide 15: Operational and Financial Matters: Answer (3c)
Operational and Financial Matters Answer (3c) : WCA adopts a cautious approach in the freighter market amidst challenging geopolitical tensions that might affect its operations. WCA plans to maintain its current fleet without adding new-generation aircraft. Thus, no further investment is required fr
Slide 16: Operational and Financial Matters: Question 4
Operational and Financial Matters Question 4 : Loss on fair value adjustments of investment securities, financial assets at fair value increased significantly to RM31.8 million (FY2022: RM6.3 million loss on fair value) (page 264 of AR2023) What were the main investment securities that had contribut
Slide 17: Operational and Financial Matters: Answer (4)
Operational and Financial Matters Answer (4) : The fair value loss of RM31.8 million was primarily attributable to specific financial investments held by a banking subsidiary of the Group. The fair value adjustments were determined based on the valuations of these investments, considering their curr
Slide 18: Sustainability Matters: Question 5
Sustainability Matters Question 5 : More than RM5 million has been allocated for 2024 to mitigate flood risk. The Flood Mitigation Plan encompass adequate flood insurance coverage, flood control systems, facilities relocation and enhancement, and critical assets protection as well as training progra
Slide 19: Sustainability Matters: Answer (5)
Sustainability Matters Answer (5) : The flood incident in 2021 significantly impacted the Group's operations, particularly in the automotive manufacturing sector. As a result, two companies estimated a 40% increase in insurance premiums. 19
Slide 20: Sustainability Matters: Question 6
Sustainability Matters Question 6 : The Group’s emission reduction target is to achieve a 35% reduction of Scope 1 and 2 carbon emissions by 2035 from the base year of 2018 and work towards achieving net-zero in 2050. In 2023, the Group’s GHG emissions for Scope 1 and Scope 2 recorded a decrease of
Slide 21: Sustainability Matters: Answer (6)
Sustainability Matters Answer (6) : In 2018, the Group set a goal to reduce Scope 1 and Scope 2 emissions by 35% by 2035. However, the COVID-19 pandemic from 2020 to 2022 severely affected the programme’s implementation. Key initiatives have been reactivated post-pandemic, and the Group remains focu
Slide 22: Corporate Governance Matters: Question 7
Corporate Governance Matters Question 7 : Practice 5.9 of the Malaysian Code of Corporate Governance (“MCCG”) states that the board should comprise at least 30% women directors. For FY2023, only one woman director out of six was on the Board, representing 16.6% of the total number of Directors. On p
Slide 23: Corporate Governance Matters: Question 7 (continued)
Corporate Governance Matters Question 7 (continued) : Apart from complying with the minimum requirement of Paragraph 15.02 of the MMLR of Bursa Securities i.e., having at least one female director on board, what steps are being taken to achieve a 30% women representation on the board as stipulated b
Slide 24: Corporate Governance Matters: Answer (7)
Corporate Governance Matters Answer (7) : The Board and Board Nomination and Remuneration Committee (BNRC) supports the MCCG’s best practice of having a 30% representation of women on the Board, i.e., by consistently considering gender diversity in the identification, assessment, and selection of po
Slide 25: Corporate Governance Matters: Answer (7) (continued)
Corporate Governance Matters Answer (7) (continued) : The Board endorses gender diversity across all organisational levels which include the Senior Management and the entire workforce. For FY2023, the female representation at Management level was 33%. As part of the ongoing journey towards continuou
Slide 26: Corporate Governance Matters: Question 8
Corporate Governance Matters Question 8 : In December 2023, the Board appointed an external independent consultant, namely Boardroom Corporate Services Sdn Bhd (“Boardroom”), to conduct the Board Effectiveness Assessment (“BEA”) exercise for the financial year ended 31 December 2023 (“BEA FY2023”).
Slide 27: Corporate Governance Matters: Answer (8a)
Corporate Governance Matters Answer (8a) : Based on the results of the BEA FY2023 conducted by Boardroom, the Board and BNRC noted Boardroom’s recommendations and areas of improvement, which the Board, together with the Management had undertaken the following: • Sustainability Framework and Policy i
Slide 28: Corporate Governance Matters: Question (8b)
Corporate Governance Matters Question (8b) : The Board began linking pertinent ESG performance indicators to Senior Management remuneration in 2023 (page 123 of AR2023). To further align with the Group’s Sustainability Commitments and targets, a KPI on the composition of renewable energy in the tota
Slide 29: Corporate Governance Matters: Answer (8b) i.
Corporate Governance Matters Answer (8b) : i. For FY2023, the ESG KPI for the Renewable Energy mix is on track at 9%, progressing towards the target of 20% by 2035. 29
Slide 30: Corporate Governance Matters: Question (8b) ii.
Corporate Governance Matters Question (8b) : ii. What was the weightage of the ESG KPIs (by percentage) vis-à-vis operational and financial metrics in the overall performance evaluation of the Board and Senior Management? 30
Slide 31: Corporate Governance Matters: Answer (8b) ii.
Corporate Governance Matters Answer (8b) : ii. At the Senior Management level, the ESG KPI weightage is 10% of the overall Corporate KPI. 31
Slide 32: Corporate Governance Matters: Question 9
Corporate Governance Matters Question 9 : During FY2023, a total cost of RM4.4 million (FY2022: RM3.4 million) was incurred as part of the resource allocation for the internal audit function, covering mainly manpower and incidental costs, such as travelling and training. As of 31 December 2023, the
Slide 33: Corporate Governance Matters: Answer (9)
Corporate Governance Matters Answer (9) : In 2023, the scope of audit review had expanded to cover broader operations, various complexity levels, and technical input to address anticipated higher operational risk and statutory compliance. This resulted in a longer audit period. Additionally, the foc
Slide 34: Thank You
THANK YOU Level 5, Wisma DRB-HICOM, No. 2 Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor, Malaysia