MANAGEMENT DISCUSSION & ANALYSIS
Corporate Overview
The Group’s resilient performance for the financial year ended 31 December 2024 was mainly driven by the steady growth in Solar Photovoltaic (“PV”) industry. Propelled by our desire to grow the renewable energy industry, we seek to expand our operations leveraging on the deeply rooted experience backed by long established track records.
The Group is currently operating a total capacity of 16.33MWac of solar plants and solar projects in Malaysia and will pursue and commit to increase its investment in the solar renewable energy business with the objective to increase its market share in this industry.
In line with our growth strategy, IL Energy Sdn. Bhd., a whollyowned subsidiary of NHB, had achieved into the following:
Completed the acquisition of 1,000,000 ordinary shares in Armani Sinar Sdn. Bhd. (“ASSB”), representing 100% equity interest in ASSB for a purchase consideration of
RM30,000,000 in cash on 27 September 2024.
- Entered into Sale and Purchase Agreement with Armani Energy Sdn. Bhd. (“AESB”) for the proposed acquisition of the solar photovoltaic energy generating system of AESB for a purchase consideration of RM68,000,000 in cash.
- These strategic acquisitions further bolster our position in the solar energy market and underscore our commitment to driving sustainable growth and enhancing our renewable energy portfolio.
Financial Performance Review
| RM’ million | 2024 | 2023 | Changes |
| Revenue | 12.22 | 46.18 | (73.5%) |
| Gross Profit | 4.47 | 4.46 | 0.2% |
| (Loss) / Profit Before Tax | (8.65) | 0.75 | (1,253.3%) |
For the current financial year ending 31 December 2024 (“FYE 2024”), the Group reported revenue of RM12.22 million, a decline of 73.5% compared to RM46.18 million in the corresponding period of the preceding year (“FYE 2023”) from continuing operations. This decrease is mainly attributed to lower revenue from the Group’s solar energy and related business segment in Malaysia, which was affected by the procurement of solar PV modules in the prior year.
However, this was partially offset by the team’s efforts in securing new solar rooftop projects and other related ventures, following the acquisition of Armani Sinar Sdn. Bhd.
Despite the drop in revenue, the Group’s gross profit (“GP”) increased slightly to RM4.47 million, compared to RM4.46 million in the prior year, mainly due to higher GP margins from construction revenue associated with new projects.
Group’s loss before tax from continuing operation for FYE 2024 amounted to RM8.65 million, a significant decline from the RM0.75 million profit recorded in FYE 2023. The net increase in loss of RM9.40 million was mainly due to the following: –
| 2024 (RM’million) |
|
| Net increase in loss (inclusive of finance income/cost) | 1.59 |
| Decreased in value from Investment in Associate | 7.81 |
| Net increase in loss before tax | 9.40 |
The Group net loss from continuing operations attributable to shareholders for FYE 2024 was RM6.79 million compared to its preceding year profit of RM0.20 million.
The (loss)/earnings per share decreased to (3.6) sen in FYE 2024, compared to earnings of 0.1 sen in FYE 2023.
Challenges to Operating Activities
One major operational challenge faced by the Group is the increasing competitive market over the recent years and continuous evolution of the industry. The Group faces competition from both local and international competitors, which resulted in competitive pricing in the market. To overcome these challenges by emphasizing on the quality of the solar PV system offered at an attractive price.
To achieved that, our Group implement effective procurement system which include bulk purchase of solar PV modules and ensuring availability of sufficient labour to execute projects through regular meetings with customers and contractors to discuss on the project schedule and implement plans accordingly.
Adequate working capital for procurement is essential to prevent any disruption in project progress due to insufficient of funds. The Group’s internal funds and available banking facilities has enabled the Group to procure the necessary materials required efficiently.
In addition, the Group is actively approaching public and private entities to secure solar energy projects through the Supply Agreement with Renewable Energy to increase its revenue levels in this solar renewable energy business segment.
Business Risks
The Group has charted its growth in solar industry while remains cognisant of its risk factors and continues to closely monitor its financial, business, operational and strategic risks.
The Group has identified and put in place mitigation initiatives to mitigate the risks identified.
The business nature of solar industry is subjected to various regulations and policies set by the authorities. As part of the mitigation initiative, the team constantly monitor for updates through local authorities’ official platforms as well as engage with the relevant business associations for latest development.
In addition, the nature of solar PV Engineering, Procurement, Construction and Commissioning (“EPCC”) works is project based and therefore, posing a risk that we may not be able to sustain our continued business growth unless we continue to secure numerous EPCC solar PV projects. To minimize the risk exposure, our Group consistently explores to venture into Supply Agreement with Renewable Energy (SARE) projects with the aim to sustain long-term recurring revenue stream.
Malaysia’s RE sector is undergoing a significant transformation, fuelled by the country’s growing dedication to sustainability and global decarbonization goals. In light of the increased emphasis on shifting towards cleaner energy sources, the government has implemented forward-thinking policies and initiatives aimed at expediting the adoption of renewable energy technologies.
The Malaysian government has updated the Solar Self-Consumption program to facilitate the energy transition and uphold corporate Environment, Social, and Governance (ESG) as well as carbon reduction goals. The revised policy eliminates the 85% capacity restriction for non-domestic users, broadening the program to encompass ground-mounted and floating solar systems, with eligibility now extended to the agricultural sector. Furthermore, the updated program requires the incorporation of Battery Energy Storage Systems (BESS) to improve grid stability and manage intermittency.
These changes present substantial opportunities for NHB to expand our influence across various industries, and NHB is strategically positioned to take advantage of these prospects.
This year, Bursa Malaysia introduced and reclassified NHB to Renewable Energy (RE) subsector within its classifications for the ‘Energy’ and ‘Utilities’ sectors. This updated classification offers a clearer and more concentrated market positioning to boost our visibility in the market, setting us apart as a leading competitor. This exposure is anticipated to draw in a wider range of investors who resonate with our goal of promoting sustainability and innovation.
The Group will continue to put in effort to reap the business opportunities in the solar photovoltaics industry in Malaysia to achieve growth in revenue and net profit. At the same time, improve sustainability/environmental, social and governance (ESG).
The management would like to express their gratitude to the Board of Directors, shareholders, clients, business partners, contractors and financiers for their support.