Chairman's Statement

Chairman's Statement

Extracted from Annual Report 2016


Dear Shareholders,

On behalf of the Board of Directors (the "Board") of C.I. Holdings Berhad (the "Company"), I am pleased to hereby present the 2016 Annual Report incorporating the Financial Statements of C.I. Holdings Berhad and its subsidiaries (the "Group") for the financial year ended 30 June 2016.

Financial Performance

For the financial year under review, the Group recorded total revenue of RM1.31 billion, an increase of 227 percent compared to revenue of RM399.28 million last year. The Group also recorded profit before tax of RM52.32 million as compared to a profit before tax of RM17.15 million last year. The increase as aforesaid was mainly attributable to the Edible Oil Products Division, given the soft property development market which has adversely affected the sales of the Tap and Sanitary Ware Division.

The Group ended the financial year under review with a net profit of RM38.35 million as compared to last year's net profit of RM13.09 million. The current year's result is based on the full year's performance following from the previous year's acquisition of the Palmtop Vegeoil Products Sdn Bhd Group ("Palmtop Group").

Review Of Continuing Operation

Edible Oil Products Division

The Edible Oil Products Division consists of Continental Resources Sdn Bhd ("CRSB") and the Palmtop Group.

CRSB operating out of two plants is based in Banting, Klang comprising 17 packing lines with a rated packing capacity of 260,000 metric tonnes of edible oils per annum and 25 oil tanks with a total capacity of 2,360 metric tonnes.

Additionally, CRSB has several jerry can molding plants with a monthly production capacity of 240,000 jerry cans in various sizes per month.

The Palmtop Group comprises Palmtop Vegeoil Products Sdn Bhd, PNC Oil Factory (Malaysia) Sdn Bhd and Continental Palms Pte Ltd, operates two packing plants based in Pasir Gudang, Johor and a sales & marketing office based in Singapore. Palmtop Group comprises 14 packing lines with a packing capacity of 550,000 metric tonnes of edible oils per annum and 20 oil tanks with a total capacity of 1,800 metric tonnes.

The Edible Oil Products Division contributed a revenue of RM1.26 billion and a total profit after tax of RM38.48 million for the financial year under review.

The division exports approximately 91% of its products worldwide during the year under review, thereby increasing the risk of exposure to currency exchange. However, this risk is mitigated by way of forward currency contracts, wherever possible.

Tap and Sanitary Ware Division

The Tap and Sanitary Ware Division currently operates out of its Senawang, Negeri Sembilan factory. The division generated RM41.61 million in revenue, an increase of 3.2 percent from RM40.31 million last year. This was due to an increase in the number of retail distribution outlets, better projects sales and growth in the export markets during the year.

Notwithstanding the above, as a result of the influx of cheap imports into the market and softening of the property development market, the division recorded a loss after taxation of RM0.16 million representing a decrease of 131 percent, from a profit after tax of RM0.51 million of the previous financial year. The loss was mainly due to a one-off impairment loss on stock obsolescence and allowance for doubtful debts of RM1.35 million.


The Board is recommending for shareholders' approval, a first and final single-tier dividend of 5 sen per ordinary share of RM0.50 each for the financial year under review.

Current Year And Future Prospect

The Group will remain focused on its path in growing the revenue and increasing the overall operating efficiency for both the Tap and Sanitary Ware and Edible Oil Products Divisions, alongside the aim of enhancing shareholders' value.

To this end the Edible Oil Products Division is planning to expand its packing and jerry-can molding capacities at both its locations by investing in more efficient and less labour intensive machines.

With the softening of the property development market, the Tap and Sanitary Ware Division has streamlined its operations by collaborating with Original Equipment Manufacturers ("OEM") for the manufacture of price-sensitive tap and sanitary wares. In addition the Tap and Sanitary Ware Division has also commenced trading in other materials with the view of increasing revenue and maximizing margins.


On behalf of the Board of Directors, I would like to express our appreciation to the management and staff of the Group for their persistent commitment and dedication.

My gratitude also goes to our loyal shareholders, business associates, and bankers for the continuous support, assistance and confidence given to us.

Finally, I would like to thank my fellow Board members for their good counsel, invaluable contribution and unwavering support throughout the year.