Chairman's Statement

CHAIRMAN'S STATEMENT

 

Dear Shareholders,

On behalf of the Board of Directors, it is my pleasure to present the Annual Report and the Audited Financial Statements of Mentiga Corporation Berhad and its Subsidiaries (“the Group”) for the financial year ended 31st December 2016.

The global growth continues to moderate for second consecutive year defying the initial expectations of the improvement from the growth rate recorded in 2015. Throughout the year, the global economy recorded the lowest GDP growth since the global financial crisis. This was influenced by the global weak in commodities prices amid heightened political and policy uncertainties in major economies. There have been a growing scepticism on the benefit of globalisation as shown in UK’s Brexit referendum and the result of US presidential election.

On the domestic front, our economy continues to face headwind from higher cost of living and weak sentiment. The environment of higher prices and increased uncertainties led to moderate growth in household spending. Despite the challenging environment the Malaysian economy registered a commendable growth of 4.2 % in 2016 (2015: 5%, 2014: 6%).

The Group performance has continued to be affected by lower price of iron ore and the tight lending policy. The latter had affected our property development division sales projection. However, our production of Fresh Fruit Bunch had increased in 2016 and coupled with good price towards the last quarter of 2016 had improved our turnover and profit. Despite the short term adversities, we are confident to deliver a better performance especially in medium and longer term for the benefit of both shareholders and other stakeholders.


GROUP’S PERFORMANCE

During the year under review, the Group recorded revenue of RM12,684,830 and profit after taxation of RM3,578,340 compared to revenue of RM14,280,764 and profit after taxation of RM2,330,481 in the previous year. 

Our whollyowned subsidiary, Mentiga Plantation Sdn Bhd recorded a profit after taxation of RM4,343,567 compared to loss after taxation of RM20,589,059 in the previous year.


PROSPECTS

The domestic economy and financial landscape are likely to remain challenging in 2017. However, we anticipate resuming our iron ore mining as the price has stabilised around USD80 per Metric ton. The weaker MYR against USD will also help to improve our sales proceed.

We are expecting some income from our development project in Bandar Pusat Jengka, Pahang by our wholly own subsidiary Mentiga Development and Construction Sdn Bhd under a JV project. In addition, we are also anticipating income from timber extraction and trading in timber related products.

We will continue to stay focus to develop our oil palm estate. Currently we have 3,833 hectares of planted area and will continue planting the remaining 4,700 hectares. We anticipate our sales of FFB will continue to improve this year as more of our plantation area is matured. The plantation sector is anticipated to be the main long term income contributor to the group. DIVIDEND The Board of Directors has recommended the payment of first and final dividen of 1 sen per share on 70,000,000 ordinary share amounting to RM700,000 for the financial year ended 31st December 2016. The proposed first and final dividend will be subject to the approval of shareholders at the forthcoming Annual General Meeting (“AGM”) and once approved the dividend shall be paid on 14th June 2017.


ACKNOWLEDGEMENT

On behalf of the Board, I wish to convey my appreciation to the management and staff for their diligence, dedication, loyalty and contribution towards achieving profitability during this difficult year. I wish also to express my gratitude to the shareholders, financiers, business associates, regulatory authorities and all stakeholders for the continued support and confidence for the Group. Finally, I would like to express my appreciation to the Board Members for their contributions and unwavering support during the year. I look forward to their continued enthusiasm, wisdom and cooperation in guiding the Group through the challenges in the year ahead.


Wassalam,

YAB Dato’ Sri DiRaja Haji Adnan bin Haji Yaakob
SDSA., SSAP., DSAP., DGSM.
Chairman

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