CCK Consolidated Holdings Berhad (396692-T)

CHAIRMAN STATEMENT



Industry Trend

The global economy faced a challenging time in 2015. Despite a prolonged 7-year period of economic stimuli, the major world economies continued to struggle to take-off. The fall in prices of oil and commodities indicated sluggish demands globally.

In Malaysia, consumer spending was affected by the implementation of GST in April 2015. High household debt, rising costs of living and a weaker employment market placed the economy under severe stress. Coupled with low global prices for oil and liquefied natural gas (“LNG”), one (1) of Malaysia’s key exports, the country’s fiscal and current account balances were badly hit. The weak economic performance and numerous fiscal challenges have also put pressure on the Malaysian Ringgit which depreciated to levels not seen since the Asian financial crisis of the late 1990s. GDP for 2015 fell to 5.0 (2014: 6.0) whilst the consumer price index (“CPI”) stood at 2.1 (2014: 3.1).


CCK Group Performance

For the financial year ended 31 December 2015, the Group recorded a revenue of RM494 million as compared to RM451 million in the financial year ended 31 December 2014, an increase of 9.5%. Profit before tax for 2015 was recorded at RM16 million (2014: RM12.9 million), an increase of 24%. Despite the difficult economic conditions, we are indeed pleased to have been able to continue our gradual recovery and reap the benefits of our investments during the past few years.


Revenue


Profit before tax


Coprorate Development

During the tabling of Budget 2016, the Prime Minister, Datuk Seri Najib Razak announced that the minimum wage for employees in Peninsular Malaysia will be raised by RM100 to RM1,000 per month and by RM120 from RM800 to RM920 for employees in East Malaysia, effective 1 July 2016. As such, we anticipate that this increment in wages will affect our costs.


Dividend

In line with our continued focus on shareholder returns, the Board has recommended a first and final single-tier dividend of 3.0 sen per share for the financial year ended 31 December 2015. This final dividend is subject to the shareholders’ approval at the forthcoming annual general meeting of CCK.


Corporate Social Responsibility

At CCK Group, we believe in balancing our social, economic and environmental responsibilities. We constantly seek avenues to balance economic growth with a positive impact on the environment in which we operate. We also recognise the importance of maintaining active dialogue with our stakeholders including employees, investors, suppliers, regulators and others. Some of our CSR contributions include:

  1. “Feed the Poor” program of SMK Kampung Nangka in Sibu, Sarawak. The program aims to provide meals to the students of the school for the duration of the school year.
  2. Wheelchairs for disabled senior citizens.
  3. Food for victims of floods.
  4. Various contributions to the Cheshire Home, Salvation Army Boys’ Home, Sibu Autistic Association Food Fair, Kuching Autistic Association Food Fair and KFC & Pizza Hut Malaysia World Hunger Relief 2015.

Employee engagement remains a high priority as we believe that our people are our best assets. Recognising that we are in the food business, maintaining a high level of cleanliness and health among our employees is crucial. As such, we constantly strive to adhere to the standards of the Department of Safety and Health (“DOSH”) and the Ministry of Health (“MOH”). To ensure our employees are fully aware of this, there are always new training courses and new equipment introduced to ensure our employees are working in a safe and secure environment.


Prospects

The year ahead will be a challenging one for the Malaysian economy as low oil and commodity prices persist on the back of a weaker currency. Headline inflation is expected to rise to 2.7% in 2016, from 2.1% in 2015, on account of higher imported inflation from currency depreciation, higher toll charges and higher cost of goods and services from the removal of more subsidies.

With tough times expected, we at CCK remain positive about 2016 and beyond. The investments made in the past few years are now gradually bearing fruit and we believe that our performances in the future will reflect the strength of our position.


Appreciation

The consistency of CCK’s growth relies on the quality of our people who have worked tirelessly to contribute to the Group’s success. Here, I would like to say a big thank you to my fellow directors, the management teams and the various heads of departments together with all our staff for their dedication and hard work. I believe that together, we can continue to scale greater heights.

As always, on behalf of the Board and Management, I would like to express our appreciation to our shareholders, suppliers, customers and business partners for their continued support, loyalty and belief in CCK.



DATUK TIONG SU KOUK

Chairman
6 April 2016