Annual Report 2011 (Part I) - Wawasan TKH Holdings Berhad

CHAIRMAN’S STATEMENT
003
Our esteemed shareholders,
On behalf of the Board of Directors, I am pleased to present the Annual
Report of Wawasan TKH Holdings Berhad for the financial year ended
31 December 2011.
Operating costs for the disposal foodwares segment
were adversely compromised by the prevalent
volatile prices of petrochemical resin materials,
increases in energy/fuel costs and interest rates.
On the back of strong market demand, sales were
on decent growth through the first three quarters
of the year. However, the fourth quarter of the year
unfortunately saw a decline in sales, mainly due to
production constraints (following a fire incidence
in November 2011), thus affecting gross margins.
BUSINESS AND FINANCIAL REVIEW
The year 2011 remained adamant in terms of stiff
challenges and uncertainties, again seen in both
global market conditions and related economic
landscapes. The common hurdles, such as
prevailing volatility in foreign currency exchange
rates, escalating crude oil prices and slow
recovery of major economies, continued to cast
a pall over the business outlook and consumers
sentiment.
During the year, on-going production mix and
cost rationalisation exercises have positive effects
in mitigating escalation in petrochemical resin
materials costs and other operating costs. It is
heartening to see that the ongoing initiatives
implemented in the production planning and
control, manpower utilisation and process
improvement have progressively led to lower cost
of production and increased efficiency.
The disposal foodwares division disposed off two
of its landed properties in Ijok and Singapore,
realising total gains on disposals amounting to
RM2.2 million during the year.
The better news is that, while squaring up against
all these less-than-favourable factors, our overall
financial performance for the year under review
remained fairly resilient - with the Group generating
a marginally higher revenue at RM70.3 million
against RM69.6 million in the previous year, even
while incurring a reduced net loss of RM14.8
million vis-à-vis a net loss of RM16.6 million last
year.
The main contributor to the Group’s turnover, that
is the disposable foodwares business, achieved
a marginally higher sales of RM57.5 million as
against RM56.5 million in 2010. This division registered
lower pretax loss of RM8.4 million compared
to pretax loss of RM12.5 million in the previous
year.