2021-12-29-港交所-璋利国际_截至2021年9月30日止十二个月之中期报告_46页_785kb

BUILDING GREEN: BGMC INTERIM REPORT SUMMARY

Core Content

This document presents the unaudited condensed consolidated interim results of BGMC International Limited for the twelve months ended 30 September 2021, alongside audited comparative figures for the financial year ended 30 September 2020. The report provides a comprehensive overview of the company's business performance, financial status, corporate governance, and future outlook.

Key Information

• Company Name: BGMC International Limited (璋利國際控股有限公司)
• Stock Code: 1693
• Headquarters in Malaysia: A-3A-02, Block A, Level 3A, Sky Park One City, Jalan USJ 25/1, 47650 Subang Jaya, Selangor Darul Ehsan, Malaysia
• Principal Place of Business in Hong Kong: Unit 2413A, 24/F, Lippo Centre, Tower One, 89 Queensway, Admiralty, Hong Kong
• Registered Office: Ocorian Trust (Cayman) Limited, Windward 3, Regatta Office Park, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands
• Company Secretary: Mr. Chen Kun
• Authorised Representatives: Dato' Teh Kok Lee, Mr. Chen Kun
• Independent Auditor: ZHONGHUI ANDA CPA Limited
• Principal Banker: United Overseas Bank Limited, 23/F, 3 Garden Road, Central, Hong Kong

Corporate Structure

Executive Directors

• Dato' Teh Kok Lee (Chief Executive Officer)
• Dato' Mohd Arifin Bin Mohd Arif (Vice-chairman, resigned on 30 August 2021)
• Mr. Ching Hong Seng (Retired on 31 March 2021)
• Tan Sri Dato' Sri Goh Ming Choon (Resigned on 7 October 2020)

Independent Non-Executive Directors

• Tan Sri Dato' Seri Kong Cho Ha
• Mr. Kua Choh Leang
• Datuk Kamalul Arifin Bin Othman (Chairman, appointed on 7 October 2020)
• Ms. Chan May May (Resigned on 7 October 2020)

Committees

• Audit Committee: Mr. Kua Choh Leang (Chairman), Tan Sri Dato' Seri Kong Cho Ha, Datuk Kamalul Arifin Bin Othman (appointed on 7 October 2020), Ms. Chan May May (resigned on 7 October 2020)
• Remuneration Committee: Datuk Kamalul Arifin Bin Othman (Chairman, appointed on 7 October 2020), Mr. Kua Choh Leang, Tan Sri Dato' Seri Kong Cho Ha (appointed on 7 October 2020), Ms. Chan May May (resigned on 7 October 2020), Tan Sri Dato' Sri Goh Ming Choon (resigned on 7 October 2020)
• Nomination Committee: Tan Sri Dato' Seri Kong Cho Ha (Chairman, appointed on 7 October 2020), Dato' Teh Kok Lee, Datuk Kamalul Arifin Bin Othman (appointed on 7 October 2020), Ms. Chan May May (resigned on 7 October 2020)
• Risk Committee: Dato' Teh Kok Lee, Tan Sri Dato' Seri Kong Cho Ha, Mr. Kua Choh Leang, Datuk Kamalul Arifin Bin Othman (appointed on 7 October 2020), Dato' Mohd Arifin Bin Mohd Arif (resigned on 30 August 2021), Ms. Chan May May (resigned on 7 October 2020)

Business Segments

Construction Services Sector

• Revenue Contribution: RM155.7 million (77.4%) for 2021 vs. RM180.2 million (59.7%) for FY2020
• Impact of MCOs: The imposition of Movement Control Orders (MCO), Conditional Movement Control Orders (CMCO), Full Movement Control Orders (FMCO), and Recovery Movement Control Orders (RMCO) significantly impacted construction productivity and suspended works from 1 June 2021 to mid-August 2021.
• Major Projects:
  • The Sky Seputeh: 2 towers with 290 apartment units, car parks, and facilities
  • Bangsar 61: 4-storey basement car park
  • Setia Spice: 26-storey building with 19-storey hotel and car parks

Concession and Maintenance Sector

• PPP Contracts: The Group has one PPP contract with Tenaga Nasional Berhad (TNB) under the BOO model, involving a 30 MW solar power plant in Kuala Muda, Kedah.
• Revenue Contribution: RM36.0 million (17.9%) for 2021 vs. RM111.1 million (36.8%) for FY2020
• Project Delays: The commercial operation date (COD) was revised to the first quarter of 2022 due to delays from the MCO, supply chain disruptions, and slow progress in the EPCC contract.

Financial Highlights

Revenue

• Total Revenue: RM201.1 million for 2021 vs. RM301.6 million for FY2020
• Construction Services Sector: RM155.7 million (down 13.6%)
• Reasons for Decline: Reduced productivity due to MCOs and social distancing measures

Gross Loss

• Gross Loss Margin: Improved to 12.2% in 2021 from 25.4% in FY2020
• Reason for Improvement: Termination of two significant Building and Structure projects in FY2020, where costs could not be charged to a customer

Administrative and Other Expenses

• Total Expenses: RM49.9 million for 2021 vs. RM38.8 million for FY2020
• Key Factors: Loss on disposal of KAS Engineering (RM14.3 million), impairment of trade receivables and contract assets (RM7.6 million)

Finance Costs

• Finance Costs: RM11.8 million for 2021 vs. RM6.7 million for FY2020
• Reasons for Increase: Financing for the LSSPV power plant project and interest on redeemable preference shares (RM7.8 million)

Income Tax Credit

• Income Tax Expense: Reversed to a credit of RM2.4 million for 2021 from a debit of RM5.6 million in FY2020
• Reason for Reversal: Over-provision of income tax expenses in FY2020 (RM2.0 million)

Liquidity and Capital Structure

• Net Gearing Ratio: 0.17 as of 30 September 2021 vs. 0.25 as of 30 September 2020
• Total Borrowing: RM69.6 million (up from RM69.3 million)
• Cash and Bank Balances: RM52.8 million (up from RM44.7 million)
• Net Current Liabilities: RM100.6 million (up from RM62.4 million), mainly due to LAD provisions for ongoing projects

Capital Expenditure

• Capital Expenditure: RM0.04 million for 2021 vs. RM0.12 million for FY2020
• Main Uses: Procurement of construction machinery and computer equipment

Risk and Strategy

• Foreign Exchange Exposure: Minimal, as the functional currency is RM. The only exposure is to Hong Kong Dollar denominated bank balances.
• Significant Investment: The Group held investments in associates and subsidiaries, with no other significant investments reported.
• Disposal of Subsidiary: The disposal of KAS Engineering was completed on 11 June 2021, which contributed to the repayment of RM60.9 million in bank borrowings.
• Future Prospects: The Group plans to focus on project completion, rebuilding construction capability, and monitoring national development. It also expects to benefit from improved vaccination rates in Malaysia, which have enabled a return to normal operations.

Conclusion

BGMC International Limited has navigated significant challenges due to the impact of the pandemic and MCOs, which disrupted construction activities and increased project delays. The company has taken steps to restructure its financial obligations, redeploy resources, and revise project timelines. Despite these challenges, the Group remains optimistic about its future performance, leveraging its experience, improved operational environment, and financial restructuring.