| Chairman's Statement |
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| Dear valued shareholders, on behalf of the Board of Directors, I am pleased to present the Annual Report and Financial Statements of Sunzen Biotech Berhad for the financial year ended 31 December 2010. |
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FINANCIAL REVIEW |
For the financial year ended 31 December 2010, the Group recorded an improvement in the financial results performance as follows:
- Group revenue of RM29.49 million
- Profit before tax of RM2.52 million
- Net earnings of RM2.15 million
- Basic earnings per share of 1.44 sen
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| The performance for the financial year ended 31 December 2010 was more favorable
as compared to previous years mainly due to the continuous global financial crisis
recovery that has taken place. Nevertheless, the pricing for the basic feeding
ingredients of the poultry and livestock industries remained high due to persistent
fluctuation of oil prices worldwide. However, the demand for animal health products
in the livestock and poultry industries had been unexpectedly healthy and steady.
The Group's revenue increased by 4.4% (2009: RM28.26 million), net earnings
improved by 22.86% due to lower cost of major raw materials for manufactured
products and tax saving arising from the 100% tax exemption of the statutory
income of Sunzen Lifesciences Sdn Bhd for the BioNexus status awarded. Revenue
contributed from domestic and overseas markets was 74% and 26% respectively.
Key overseas markets included Iran, Singapore, Philippines and Vietnam. |
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OPERATION REVIEW |
The Group has implemented various strategies to increase sales
volume and profit margin. We have actively carried out technical
seminars to strengthen branding of products, sponsoring key
customers to participate in overseas technical seminars as well
as in livestock exhibitions. We have also participated in overseas
livestock exhibitions and conferences by presenting technical
papers to promote our products in overseas markets. Our strategy
of focusing on the emerging market of companion animal products
had contributed positively to the results of the Group. |
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DIVIDEND |
The Board of Directors is proposing a tax-exempt final dividend of
0.45 sen per share subject to approval of the shareholders at the
forthcoming Annual General Meeting. The total dividend declared
for the financial year ended 31 December 2010 including the earlier
interim dividend of 0.6 sen per share paid on 13 January 2011,
would be 1.05 sen per share. The lower dividend payout for this
financial year ended 31 December 2010 was due to the additional
funds required for working capital in light of development of new
markets in overseas in particular. |
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LOOKING AHEAD |
The financial year ending 31 December 2011 is expected to be
brighter in view of the progressive improvement in the economic
activities of the global markets. We will strive to deliver more
innovative and quality products continuously, as well as to
strengthen our brand equity as a reputable animal health supplier.
We anticipate a better year for overseas markets including China,
Middle East and other ASEAN countries in view of more allocation
of resources and focus on the expansion of marketing networks
in these markets by working closely with the distributors of the
respective foreign regions.
In addition, we will also be looking into trademarks and patent
rights applications with the relevant government and authorities to
avoid any misuse or copy of our products as and when deemed
expedient in new overseas markets. This would form part of the
preliminary planning and preparation for exportation of products to
the new overseas markets and hence, would enable the Group to
sustain growth in sales as well as in profit margin in the future. The Group will also be strengthening its marketing strategies in
the companion animal market to increase our market share by
launching new products supplied by our principal. One of the
new products known as "Revolution", a parasitic medication for
cat and dog which is currently a big seller in world market and
nevertheless, the Group anticipate that these new products would
help generate incremental sales to its future business.
In terms of new product development with the collaboration of
USM (University Science of Malaysia), a TechnoFund Grant of
RM1.155 million from Ministry of Agriculture has been allocated to
Sunzen Feedtech Sdn Bhd for the purpose of conducting research
on the use of organic acid compound in aquaculture. This is an
exciting prospect for the Group as aquaculture is a sizable market
in the industry.
The Group will continue to invest in human capital development
and manufacturing facilities to achieve GMP (good manufacturing
practice) status as required by new regulation of the relevant
authority by year 2012. The Group will continue to exercise
prudence in its management and good corporate governance. |
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ACKNOWLEDGEMENT |
On behalf of the Board, I would like to express our gratitude to the
relevant government authorities and research institutions for their
assistance and support.
The Board also wishes to thank all our valued shareholders,
employees, customers, business associates, financiers and
suppliers for their continuous support and confidence in the
Group. Lastly, I would also like to extend my appreciation and
thanks to my fellow members of the Board for their guidance and
concerted effort during their stewardship in 2010. |
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| Thank you. |
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| Dr Tan Kim Sing |
| Chairman |
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