During the year under review, the Group recorded a revenue
growth of 23% to RM194.5 million as compared to RM164.6
million for the same period in the preceding year. However,
profit after tax was 36% lower at RM36.9 million during the
financial year as compared to a profit after tax of RM57.6
million in the previous year. The drop in profit is due to lower
profit from the discontinued China concessions as a result of the
completion of disposal transactions under SPA-B apart from
Salcon Linyi (HK) Limited.
We are delighted that the Group has successfully secured two
landmark projects in Selangor, namely Langat 2 Water
Treatment Plant project and the Langat Centralized Sewage
Treatment Plant project with a combined contract value of
nearly RM600 million in April and December 2014 respectively.
These two projects will keep us busy for the next 2-3 years and
are expected to contribute positively to the Group's earnings
in the coming financial year.
The Group's balance sheet remains strong with shareholders'
funds at RM540.4 million whilst cash and cash equivalents of
RM294.5 million as at 31 December 2014. The Group is at net
cash position in terms of gearing.
As demonstrated in previous years, the Company remains
committed to a progressive dividend policy for the financial
year ended 2014 and the Board is proposing a first and special
final single tier dividend of 3.0 sen per share equivalent to
Awards & Recognition
In April this year, Salcon was awarded IEM Award for
Contribution to Engineering Industry in Malaysia by the
Institution of Engineers Malaysia in recognition of its contribution
and achievement in Water and Wastewater Engineering.
The Group was also awarded the Best Site Construction
Management under the category of 'Projek Pembinaan Sistem
Rangkaian Paip Pembetungan bernilai melebihi RM100 juta' by
Jabatan Perkhidmatan Pembetungan (JPP). The award and
recognition for best construction site management is testament
to the Group's excellence in the construction management of
Package D55 which involved upgrading works of sewerage
services in Klang. The award was presented by YB Datuk Seri
Panglima Dr Maximus Johnity Ongkili, the Minister of Energy,
Green Technology and Water during the 'Malam Amal Mesra'
organized by JPP - Yayasan Hijau on 23rd November 2014.
Business Outlook & Prospects
As a premier water and wastewater engineering treatment
specialist in Malaysia and other Asian regions since 1974, Salcon
continues to play a vital role in the water and wastewater industry.
Having established a strong foothold in our core business of water
and wastewater management, the Group has started venturing
into property development and technology services, as part of its
long-term strategic plans to diversify its businesses and revenue
The Malaysian economy is expected to expand at a steady pace
with Gross Domestic Product (GDP) growth of between 4.5% to
5.5% in 2015, despite the declining crude oil price and ringgit
depreciation. This modest growth will be driven by resilient
domestic demand underpinned by the 2015 Budget measures
and the anticipated improving external sector given the better
global economic outlook.
In terms of prospects for water and wastewater projects, in the
National Budget 2015 announced in October last year by the
Prime Minister, the Government will formulate a National Water
Blueprint to ensure sustainable long-term water supply nationwide.
These include holistic management of rivers, construction and
improving water treatment plants all of which are expected to
create opportunities for the Group.
The Group will remain vigilant to market changes and alert to take
on such opportunities that may arise from the domestic and
overseas markets that the Group operates in.
As for property development, the Group is positive with the growth
of the industry. We believe that buying interest should progressively
return as potential house buyers come to the realisation that
property prices are resilient and that potential inflationary pressures
from the implementation of the GST in April 2015 could push up
property prices further.
In our new technology services venture, we look forward to good
contribution as the Group anticipates to sign new contracts to
supply fibre optic services as well as build on other ancillary
businesses by leveraging on our fibre optic infrastructure and
through strategic partnerships.
We are confident that with our good management skills and
expertise together with the new areas that we venture in, we will
deliver on our promises and excel in our performance. We remain
committed to the objectives that have driven our success over the
past 40 years. These values are ingrained into our corporate culture
and are followed in every aspect of our business operation through
our five core values: Commitment, Teamwork, Professionalism,
Respect and Results.
We place our corporate responsibilities high on our agenda to
ensure good corporate governance practices to instil
confidence in the Group. We subscribe and will continue to
uphold the principles of good corporate governance as we
believe that it is the platform for sustainable enhancement of
I would like to take this opportunity to express our appreciation
to the management and employees of the Group for their
dedication and commitment and to our shareholders, partners,
customers, suppliers, bankers and regulatory authorities for their
invaluable support and assistance during the year. We look
forward to their continuous support to embrace and overcome
the new challenges ahead.
Last but not least, on behalf of the Board, I would like to express
our sincere appreciation and highest gratitude to Mr. Ho Tet
Shin for his dedication and contribution during his tenure as an
Independent Non-Executive Director of Salcon Berhad since
2005. I take this opportunity to wish him all the best for his future
endeavors. I am pleased to welcome Mr. Chan Seng Fatt, an
experienced management leader in various corporate entities
for more than 25 years as a new member to the board.