Group Managing Director MR. CHIA SONG KOOI Group Managing Director’s Review Group Managing Director’s Review QL emerged from the storm of FY2022 with the winds in our sails. Our honed strategy of investing in strategic business growth opportunities and strengthening core competencies helped QL to not just weather the storm but return a positive performance in a challenging year. Staying true to our strategic vision and working cohesively enabled QL to drive sustainable value creation. Entering FY2023, the global landscape was unsettled by geopolitical conflicts and China’s approach to COVID-19, which had significant ramifications for the supply chain. The impact was felt as energy prices surged and commodity prices too followed. Growing concerns about inflationary pressures prompted interest rate hikes as a measure to manage consumer prices. The weakened purchasing power eventually drove down consumer sentiment and subsequently affected demand for goods and supplies. These interrelated forces created a tough business environment that required adaptability and careful navigation. Such a landscape also has a far-reaching impact on the global food environment. The supply chain which was recovering from disruptions caused by COVID-19 lockdowns faced a new challenge in energy costs and high commodity prices due to the Russia-Ukraine conflict, and these ate away at food security. As an agro-food producer, QL is committed to ensuring uninterrupted operations, to effectively supply nutritious and affordable food to meet the changing needs of customers. Our steadfast focus enabled QL to turn in a 19.2% year-on-year (YoY) revenue increase to RM6.24 billion. By focusing on expanding our business and enhancing our core competencies, the people within QL stood as a unit, leveraging teamwork to overcome challenges and deliver a record PBT of RM480.83 million and profit after tax and minority interests (PATAMI) of RM346.82 million. FY2023 witnessed pent up demand benefitting Marine Products Manufacturing (MPM), Integrated Livestock Farming (ILF) and Convenience Store Chain (CVS). Sales volumes recovered and unit price rose as the transition into endemicity boosted productivity and consumer demand. On the other hand, Palm Oil and Clean Energy (POCE) experienced a difficult year, with slightly lower YoY revenue. However, the strong contributions from MPM, ILF and CVS helped balance the downward pressure on revenue exerted by POCE. We also saw labour regulation changes in the form of a new minimum wage and reduction in maximum weekly working hours coming into effect during FY2023. This added to the weakening consumer sentiment which was straining margins especially when operating costs also rose higher. Our four business pillars positioned us to navigate through challenges and seize opportunities. Overall efficiency initiatives alongside government cost subsidy to aid the tight egg supply situation helped normalise profitability margins. Together with the robust demand for surimi and surimi-based products, this guided QL towards double digit revenue growth and strong profitability recovery. The CVS expansion has progressed according to plan and now positioned this business pillar as a substantial contributor going forward. QL remained resolute in our promise of delivering sustainable value to stakeholders. Our resilience and perseverance in our mission to create nourishing products from agro resources has established us as a trusted food producer. QL is the largest fishmeal producer and the FamilyMart master franchisee in Malaysia, the preferred poultry egg producer in the three countries of our operations, the largest surimi producer in Southeast Asia as well as the top 10 surimi-based products producer in the world. Further analysis about our business performance and operational outlook can be read in the Business Review on pages 18 - 25. 2023 Revenue RM6,242.64 m i l l i o n 2023 PBT RM480.83 m i l l i o n FY2021 FY2021 4,378.80 432.56 FY2022 FY2022 5,236.05 321.21 FY2023 FY2023 6,242.64 480.83 013 012 QL RESOURCES BERHAD INTEGRATED ANNUAL REPORT 2023 SEC. PG. PG. MANAGEMENT DISCUSSION AND ANALYSIS 4
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