UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2024
As at | As at | |
31-Mar-24 | 31-Dec-23 | |
(Unaudited) | (Audited) | |
ASSETS | RM'000 | RM'000 |
Non-current assets | ||
Property, plant and equipment ("PPE") | 128,069 | 115,433 |
Investment properties | 14,576 | 14,602 |
Right of use assets ("ROU") | 17,614 | 18,318 |
Investment in associates | 27,325 | 25,915 |
Investment securities | 2,466 | 1,937 |
Intangible assets | 109 | 116 |
Other receivables | 706 | 706 |
Deferred tax assets | 1,107 | 1,075 |
191,972 | 178,102 | |
Current assets | ||
Inventories | 199,891 | 201,584 |
Trade and other receivables | 101,825 | 105,006 |
Tax recoverable | 1,142 | 1,445 |
Cash and bank balances | 49,187 | 55,277 |
352,045 | 363,312 | |
TOTAL ASSETS | 544,017 | 541,414 |
EQUITY AND LIABILITIES | ||
Equity | ||
Share capital | 99,588 | 99,588 |
Treasury shares | (5,108) | (4,957) |
Reserves | 2,871 | 3,637 |
Retained earnings | 242,850 | 238,479 |
Equity attributable to owners of the parent | 340,201 | 336,747 |
Non-controlling interests | 61,930 | 60,596 |
Total equity | 402,131 | 397,343 |
Liabilities | ||
Non-Current Liabilities | ||
Bank borrowings | 23,504 | 23,464 |
Lease liabilities | 3,452 | 4,276 |
Deferred tax liabilities | 697 | 490 |
27,653 | 28,230 | |
Current liabilities | ||
Trade and other payables | 54,359 | 55,991 |
Bank borrowings | 57,122 | 55,296 |
Lease liabilities | 2,020 | 2,319 |
Tax payable | 732 | 2,235 |
114,233 | 115,841 | |
Total liabilities | 141,886 | 144,071 |
TOTAL EQUITY AND LIABILITIES | 544,017 | 541,414 |
The condensed consolidated statement of financial position should be read in conjunction with the audited financial statements for the year ended 31 December 2023 and the accompanying explanatory notes attached to the interim financial statements.
Page 1 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
CONDENSED CONSOLIDATED INCOME STATEMENTS
FOR THE THREE MONTHS ENDED 31 MARCH 2024 (UNAUDITED)
Current quarter | Cumulative quarter | |||
3 months ended | 3 months ended | |||
31 March | 31 March | |||
2024 | 2023 | 2024 | 2023 | |
RM '000 | RM '000 | RM '000 | RM '000 | |
Revenue | 72,544 | 78,959 | 72,544 | 78,959 |
Operating expenses | (65,603) | (67,611) | (65,603) | (67,611) |
Other income | 820 | 676 | 820 | 676 |
Operating profit | 7,761 | 12,024 | 7,761 | 12,024 |
Interest expense | (1,794) | (1,616) | (1,794) | (1,616) |
Interest income | 116 | 103 | 116 | 103 |
Share of results of associates | 1,353 | 872 | 1,353 | 872 |
Profit before tax | 7,436 | 11,383 | 7,436 | 11,383 |
Taxation | (1,731) | (2,961) | (1,731) | (2,961) |
Profit for the period | 5,705 | 8,422 | 5,705 | 8,422 |
Profit attributable to: | ||||
Owners of the parent | 4,371 | 6,816 | 4,371 | 6,816 |
Non-controlling interests | 1,334 | 1,606 | 1,334 | 1,606 |
Profit for the period | 5,705 | 8,422 | 5,705 | 8,422 |
Earnings per share ("EPS") attributable to owners | ||||
of the parent (sen): | ||||
Basic EPS | 2.98 | 4.62 | 2.98 | 4.62 |
Diluted EPS | N/A | N/A | N/A | N/A |
The condensed consolidated income statements should be read in conjunction with the audited financial statements for the year ended 31 December 2023 and the accompanying explanatory notes attached to the interim financial statements.
Page 2 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED 31 MARCH 2024 (UNAUDITED)
Profit for the period
Other comprehensive income/(expenses), net of tax:
Currency translation differences arising from consolidation
Fair value movements on available for sale investments
Total comprehensive income for the period
Current quarter | Cumulative quarter | ||
3 months ended | 3 months ended | ||
31 March | 31 March | ||
2024 | 2023 | 2024 | 2023 |
RM '000 | RM '000 | RM '000 | RM '000 |
5,705 | 8,422 | 5,705 | 8,422 |
(1,564) | 8,225 | (1,564) | 8,225 |
798 | (264) | 798 | (264) |
4,939 | 16,383 | 4,939 | 16,383 |
Total comprehensive income attributable to: | ||||
Owners of the parent | 3,605 | 14,777 | 3,605 | 14,777 |
Non-controlling interests | 1,334 | 1,606 | 1,334 | 1,606 |
4,939 | 16,383 | 4,939 | 16,383 |
The condensed consolidated statement of comprehensive income should be read in conjunction with the audited financial statements for the year ended 31 December 2023 and the accompanying explanatory notes attached to the interim financial statements.
Page 3 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THREE MONTHS ENDED 31 MARCH 2024 (UNAUDITED)
Cumulative quarter | ||
3 months ended | ||
31 March | ||
2024 | 2023 | |
RM'000 | RM'000 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Profit before tax | 7,436 | 11,383 |
Adjustments for: | ||
Depreciation and amortisation | 2,335 | 1,868 |
Other non-cash items and non-operating items | (2,803) | 4,446 |
Operating profit before working capital changes | 6,968 | 17,697 |
Inventories | 1,193 | 779 |
Receivables | 3,181 | (2,996) |
Payables | (1,632) | 177 |
Cash generated from operating activities | 9,710 | 15,657 |
Interest paid | (1,794) | (1,616) |
Net of tax paid | (2,674) | (2,404) |
Net cash from operating activities | 5,242 | 11,637 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Dividend received | 12 | 4 |
Interest received | 116 | 103 |
Net of changes of investment in subsidiaries and associates | - | 329 |
Net of purchase and disposal of investment securities | 425 | 7 |
Net of purchase and disposal of PPE and ROU | (10,333) | (11,226) |
Net cash used in investing activities | (9,708) | (10,783) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividend paid to non-controlling interests | - | (26) |
Net of repurchase of treasury shares | (151) | (125) |
Net changes in bank borrowings | 1,865 | (2,306) |
Net changes in lease liabilities | (1,122) | (640) |
Net cash from / (used in) financing activities | 592 | (3,097) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (3,874) | (2,243) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF | 49,354 | 52,717 |
FINANCIAL PERIOD | ||
Effect of foreign exchange rates changes | 2,328 | 1,689 |
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL PERIOD | 47,808 | 52,163 |
CASH AND CASH EQUIVALENTS COMPRISED THE FOLLOWING: | ||
Cash and bank balances | 49,187 | 52,585 |
Overdrafts | (1,379) | (422) |
47,808 | 52,163 |
The condensed consolidated cash flow statements should be read in conjunction with the audited financial statements for the year ended 31 December 2023 and the accompanying explanatory notes attached to the interim financial statements.
Page 4 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THREE MONTHS ENDED 31 MARCH 2024 (UNAUDITED)
|----------------------------------- | Non-Distributable--------------------------------- | | Distributable | |||||||
|---------------------------- | Attributable to owners of the parent --------------------------------- | | | |||||||
Currencies | Non- | ||||||||
Treasury | Capital | translation | Fair value | Retained | controlling | ||||
(RM'000) | Share capital | shares | reserve | reserve | reserve | earnings | Total | interests | Total equity |
Balance as at 1 January 2023 | 99,588 | (3,766) | 892 | 278 | (4,543) | 218,485 | 310,934 | 52,830 | 363,764 |
Purchase of treasury shares | - | (125) | - | - | - | - | (125) | - | (125) |
Changes in equity | - | - | - | - | - | - | - | 329 | 329 |
Dividend paid | - | - | - | - | - | - | - | (26) | (26) |
Total comprehensive income/(loss) | - | - | - | 8,225 | (264) | 6,816 | 14,777 | 1,606 | 16,383 |
for the period | |||||||||
Balance as at 31 March 2023 | 99,588 | (3,891) | 892 | 8,503 | (4,807) | 225,301 | 325,586 | 54,739 | 380,325 |
Balance as at 1 January 2024
Purchase of treasury shares
Total comprehensive income/(loss) for the period
Balance as at 31 March 2024
99,588 | (4,957) | 892 | 6,659 | (3,914) | 238,479 | 336,747 | 60,596 | 397,343 |
- | (151) | - | - | - | - | (151) | - | (151) |
- | - | - | (1,564) | 798 | 4,371 | 3,605 | 1,334 | 4,939 |
99,588 | (5,108) | 892 | 5,095 | (3,116) | 242,850 | 340,201 | 61,930 | 402,131 |
The condensed consolidated statements of changes in equity should be read in conjunction with the audited financial statements for the year ended 31 December 2023 and the accompanying explanatory notes attached to the interim financial statements.
Page 5 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
NOTES TO THE INTERIM FINANCIAL REPORT
- SELECTED EXPLANATORY NOTES UNDER MALAYSIAN FINANCIAL REPORTING STANDARD ("MFRS") 134 - INTERIM FINANCIAL REPORTING
A1 Basis of preparation
The interim financial statements are unaudited and have been prepared in compliance with MFRS 134, Interim Financial Reporting and Paragraph 9.22 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities").
The interim financial statements should be read in conjunction with the audited financial statements of the Group for the financial year ended 31 December 2023. These explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the year ended 31 December 2023.
A2 Significant Accounting Policies
The significant accounting policies and methods of computation adopted by the Group in these quarterly financial statements are consistent with those adopted in the most recent annual audited financial statements for the year ended 31 December 2023 save for the following new MFRSs and amendments to MFRSs.
Effective dates for | ||
financial periods | ||
Description | beginning on or after | |
Amendments to MFRS | Lease Liability in a Sale and Leaseback | 1 January 2024 |
16 | ||
Amendments to MFRS | Classification of Liabilities as Current or Non-current | 1 January 2024 |
101 | ||
Amendments to MFRS | Non-current Liabilities with Covenants | 1 January 2024 |
101 | ||
Amendments to MFRS | Supplier Finance Arrangements | 1 January 2024 |
107 and MFRS 7 | ||
Amendments to MFRS | Lack of Exchangeability | 1 January 2025 |
121 | ||
Amendments to MFRS | Sale or Contribution of Assets between an Investor and | Deferred until further notice |
10 and MFRS 128 | its Associate or Joint Venture |
The Group and the Company intend to adopt the above MFRSs and amendments to MFRSs when they become effective.
The adoption of the above standards and interpretations do not have material impact to the financial statements of the Group upon their initial application.
A3 Seasonal or cyclical factors
The Group performance is not materially affected by seasonal or cyclical factors.
A4 Unusual items due to their nature, size or incidence
There were no unusual items affecting assets, liabilities, equity, net income, or cash flows during the current quarter and financial period-to-date.
Page 6 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
A5 Changes in estimates
There were no changes in estimates that have material effect in the current quarter and financial period-to-date results.
A6 Debt and equity securities
There were no issuances and repayments of debt and equity securities during financial period ended 31 March 2024 save for shares buy back.
At the Annual General Meeting held on 27 June 2023, the Company's shareholders approved the renewal of authority to repurchase its own shares. During the financial period ended 31 March 2024, the Company repurchased of 88,200 own shares.
As at 31 March 2024, a total of 3,921,110 treasury shares, representing 2.60% of the issued and paid-up share capital of the Company are being held as treasury shares and carried at cost at RM5.108 million.
A7 Dividend paid
No dividend had been paid under the financial period under review.
A8 Material post balance sheet event
There were no material events subsequent to the end of the financial period ended 31 March 2024 as at the date of this report.
A9 Changes in the composition of the Group
There were no changes in the composition of the Group during the financial period ended 31 March 2024 save for:
- On 5 January 2024, Unimech Capital Sdn. Bhd., a wholly owned subsidiary company of the Company had subscribed 35% equity interest in Unimech Precision Solutions Sdn. Bhd. for a total consideration of RM50,000.
- On 5 February 2024, Arita Flange Industries Sdn. Bhd., a wholly owned subsidiary company of the Company had voluntary winding up and de-registered from Suruhanjaya Syarikat Malaysia.
- On 26 February 2024, M.E.T. Motion Holding Sdn. Bhd., a 51% owned subsidiary of the Company had subscribed 51% equity interest in M.E.T. Motion (Energreen) Sdn. Bhd. for a total consideration of RM510.
A10 Changes in contingent liabilities or contingent assets
There were no material changes in the contingent liabilities for the Group since the last financial year ended 31 December 2023.
A11 Capital commitments
No material capital commitments as at 31 March 2024.
Page 7 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
NOTES TO THE INTERIM FINANCIAL REPORT
- ADDITIONAL INFORMATION REQUIRED BY THE BURSA SECURITIES LISTING REQUIREMENTS B1 Financial review for current quarter and financial period-to-date
Individual Period | Cumulative Period | |||||
Preceding | Preceding | |||||
Current | Year | Current | Year | |||
Period | Corresponding | Period to | Corresponding | |||
Quarter | Quarter | Date | Period | |||
31-Mar-24 | 31-Mar-23 | Changes | 31-Mar-24 | 31-Mar-23 | Changes | |
RM'000 | RM'000 | RM'000 / % | RM'000 | RM'000 | RM'000 / % | |
Revenue | 72,544 | 78,959 | (6,415) / (8.1) | 72,544 | 78,959 | (6,415) / (8.1) |
Profit before tax | 7,436 | 11,383 | (3,947) / (34.7) | 7,436 | 11,383 | (3,947) / (34.7) |
Current quarter and financial period-to-date
For the first quarter ended 31 March 2024, the Group reported a revenue of RM72.544 million which was RM6.415 million or 8.1% lower as compared to the preceding year corresponding quarter ended 31 March 2023 of RM78.959 million. A lower revenue was due to soft demand from valves, instruments and fittings segment which had been mitigated by higher revenue in pump business and other business segments.
The decrease in revenue correspondingly decreased the profit before tax by 34.7% or RM3.947 million to RM7.436 million from RM11.383 million reported in preceding year corresponding quarter.
B2 Financial review for current quarter compared with immediate preceding quarter
Immediate Preceding | |||
Current Quarter | Quarter | ||
31-Mar-24 | 31-Dec-23 | Changes | |
RM'000 | RM'000 | RM'000 / % | |
Revenue | 72,544 | 84,786 | (12,242) / (14.4) |
Profit before tax | 7,436 | 10,291 | (2,855) / (27.7) |
The Group reported a decrease in revenue of RM12.242 million or 14.4% for the current quarter ended 31 March 2024 as compared to the immediate preceding quarter ended 31 December 2023. In line with the reduction in revenue coupled with higher expenses incurred, the profit before tax for the current quarter reduced by RM2.855 million or 27.7%.
B3 Overall review of group's financial performance
No material changes of the major components of the statement of profit and loss and other comprehensive income, statement of financial position as well as statement of cash flow reported by the Group for the period ended 31 March 2024 compared to preceding year corresponding period ended 31 March 2023.
Page 8 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
B4 Segment information
By business segment as at 31 March 2024
Valves, | ||||||
instruments | ||||||
and fittings | Electronic | Pumps | All others | Elimination | Total | |
RM'000 | RM'000 | RM'000 | RM'000 | RM'000 | RM'000 | |
Revenue from | ||||||
external customers | 53,183 | 3,133 | 11,140 | 5,088 | - | 72,544 |
Inter-segment revenue | 11,191 | 373 | 1,833 | 21 | (13,418) | - |
Total revenue | 64,374 | 3,506 | 12,973 | 5,109 | (13,418) | 72,544 |
Segment results | 6,667 | 529 | 1,770 | 178 | (1,383) | 7,761 |
Interest expense | (1,794) | |||||
Interest income | 116 | |||||
Share of results of associates | 1,353 | |||||
Profit before tax | 7,436 | |||||
Tax expense | (1,731) | |||||
Profit after tax | 5,705 | |||||
Non-controlling interests | (1,334) | |||||
Profit attributable to owners of the parent for financial period ended 31 March 2024 | 4,371 | |||||
Segment assets | 578,408 | 21,437 | 42,439 | 108,893 | (207,160) | 544,017 |
Segment liabilities | 134,932 | 19,289 | 24,413 | 32,270 | (69,018) | 141,886 |
By business segment as at 31 March 2023 | ||||||
Valves, | ||||||
instruments | ||||||
and fittings | Electronic | Pumps | All others | Elimination | Total | |
RM'000 | RM'000 | RM'000 | RM'000 | RM'000 | RM'000 | |
Revenue from | ||||||
external customers | 64,106 | 3,126 | 7,395 | 4,332 | - | 78,959 |
Inter-segment revenue | 13,490 | 142 | 1,526 | 91 | (15,249) | - |
Total revenue | 77,596 | 3,268 | 8,921 | 4,423 | (15,249) | 78,959 |
Segment results | 11,622 | 963 | 786 | (172) | (1,175) | 12,024 |
Interest expense | (1,616) | |||||
Interest income | 103 | |||||
Share of results of associates | 872 | |||||
Profit before tax | 11,383 | |||||
Tax expense | (2,961) | |||||
Profit after tax | 8,422 | |||||
Non-controlling interests | (1,606) | |||||
Profit attributable to owners of the parent for financial period ended 31 March 2023 | 6,816 | |||||
Segment assets | 564,617 | 19,766 | 35,751 | 107,421 | (205,217) | 522,338 |
Segment liabilities | 136,837 | 18,949 | 19,388 | 32,504 | (65,575) | 142,103 |
Page 9 of 14
UNIMECH GROUP BERHAD [199601035227 (407580-X)]
INTERIM FINANCIAL REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2024
B5 Commentary on prospects for the year 2024
The world economy is expected to be impacted by geopolitical tension, supply chain disruptions, fluctuation of exchange rates, volatile of material costs, escalating of costs due to inflation in the year of 2024. Although the global economic conditions are expected to be still challenging, it is envisioned that the economy will continue to grow, albeit at a moderate pace. The Group's core business is not expected to be significantly adversely affected barring a drastic change in global economic conditions. The Group will continue with its competitive strategy of developing further on its own brands to enhance its market position. In addition, the Group will concentrate on improving the efficiency in operations to achieve the competitive edge in the market. With strong fundamental and well established in the countries where the Group has operation, and barring any unforeseen circumstances, the Board of Directors is of the view that the Group shall report a satisfactory performance for the financial year ending 31 December 2024.
B6 Profit forecast
Not applicable as no profit forecast was published.
B7 Income tax expense | ||
Current | Cumulative | |
quarter | quarters | |
3 months | 3 months | |
ended | ended | |
31-Mar-24 | 31-Mar-24 | |
RM'000 | RM'000 | |
Current period provision | 1,556 | 1,556 |
Deferred tax | 175 | 175 |
1,731 | 1,731 |
The effective tax rate for current quarter and cumulative quarters are higher than the statutory tax rate was due to non-tax allowable expenses and losses of certain subsidiary companies cannot be used to offset against profit of other companies in the Group.
B8 Status of corporate proposals and status of utilisation of proceeds raised
There was no corporate proposal being carried out during the period under review.
Page 10 of 14