DRIVING SUSTAINABLE GROWTH - Johor Corporation
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DRIVING SUSTAINABLE GROWTH
ANNUAL REPORT 2019
About Johor
Corporation
Johor Corporation was established as a public
enterprise and a statutory body with the passing
of the Johor Corporation Enactment No. 4, 1968
(as amended under Enactment No. 5, 1995). As
a state-owned conglomerate, Johor Corporation
through its Group of Companies are involved
in core businesses comprising Plantations,
Specialist Healthcare, Food & Restaurant
Services, as well as Property.
MISSION
A conglomerate contributing to the Playing the role of catalyst for Maintaining its position as a Contributing and improving the
state and national economic growth sustainable business growth and competitive, profit generating well-being of the community
through efficient and effective subsequently achieving success and highly regarded business through business success
business entities while upholding to discharge its obligations as a entity that leads & dominates and corporate responsibility
community interests. state investment corporation. the market. undertakings.
VISION
MEMBINA & MEMBELA
JOHOR CORPORATION CORE VALUES 2.0
INTEGRITY PROFESSIONAL INNOVATIVE LOYAL TEAMWORK
We execute our task We are committed We are knowledgeable, We execute our We work as a team,
with trustworthiness, to executing our task visionary, creative, dare responsibilities with contributing to achieving a
honesty and fairness, efficiently through to lead, responsive and dedication and common goal and shared
in line with the law and professional knowledge resourceful in pursuit commitment towards vision in an interactive and
corporate governance and skills, thereby of Johor Corporation’s Johor Corporation’s conducive environment.
principles. providing excellent service Business Continuity mission and vision
and quality product Mission. while being resilient
to our customers and and devoted to Johor
shareholders. Corporation.
A NEW LOGO I N S I D E T H I S R E P O RT
FOR A NEW 1. CORPORATE STATEMENT
ERA Chairman’s Statement
Corporate Statement
4
6
Symbolises the gateway that will bridge
us all into a future of innovation and 2. ABOUT JOHOR CORPORATION
advancement
Corporate Profile & Information 13
Corporate Structure 14
Board of Directors’ Profile 16
34
3. FINANCIAL REVIEW
PROSPECTS
KULIM Statements of Comprehensive Income 20
Statements of Financial Position 22
BUSINESS
Statements of Cash Flows 24
Statement of Changes In Equity 27
Financial Performance Summary JCorp &
Group (2015-2019) 30
4 4. PROSPECTS
The new Johor Corporation (JCorp) brand identity reflects the ambition, CORPORATE STATEMENT Economic Review 32
aspiration and direction of the Group. The new logo is a representation of CHAIRMAN’S STATEMENT Kulim Business 34
Specialist Healthcare Division 42
JCorp’s forward trajectory, as well as its desired image moving forward –
dynamic, modern and forward thinking. The main distinguishing feature
42 Food and Restaurant Services Business
Property Division
48
58
in the modern logotype is its clean sharp and minimalist representation of Industrial Development Division 70
PROSPECTS
Business Development Division 78
the ‘JCorp’ identity. SPECIALIST Corporate Responsibility Division 80
HEALTHCARE Group Human Capital Management
The red ‘O’ symmetrically balances the overall logo which as a whole DIVISION Division 88
Group IT Advancement Division 92
symbolises the gateway that will bridge us all into a future of innovation and
advancement. 5. CORPORATE GOVERNANCE STATEMENT
Corporate Governance Statement 94
The typefaces used are clean and bold, connoting strength and resilience,
Risk Management and Internal Control 99
all reminiscent of an image of a world class corporation. Designed in the Board Governance & Business
colours of Johor Darul Ta’zim, our new logo also pays homage to our roots Ecosystem Committee Report 102
as we continue to carry the colours of our heritage on the path forward.
6 58 Please scan the QR Code
to link to website for more
CORPORATE STATEMENT PROSPECTS
DYNAMIC, MODERN AND CLEAN AND BOLD, CONNOTING information on how JCorp
FORWARD THINKING STRENGTH AND RESILIENCE CORPORATE STATEMENT PROPERTY DIVISION contributed to the state.
P4 P5
SECTION 1 SECTION 1
Corporate Statement Corporate Statement
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
CHAIRMAN’S
CHAIRMAN’S STATEMENT
STATEMENT JCORP’S TRANSFORMATION
TO ENABLE PROSPEROUS
JOHOR AGENDA
SINCE BEING GIVEN THE TRUST TO LEAD
THE JOHOR STATE GOVERNMENT, I HAVE
BROUGHT THE PROSPEROUS JOHOR AGENDA
TO THE FOREFRONT, WHICH WILL FOCUS
ON DEVELOPMENT IN AN EQUITABLE AND
HOLISTIC MANNER FOR THE WELL-BEING AND
PROPSPERITY OF OUR CITIZENS.
In our efforts to fully realise developments that benefit the
people, an experienced strategic institution such as Johor
Corporation (JCorp) is definitely needed to implement these
aspirations.
I am confident that JCorp will be able to accomplish the
Prosperous Johor agenda through the execution of the Johor
Sustainable Development Plan. The synergy between JCorp,
State Government and related agencies involved in the
development of Johor must also continue to be galvanised. This role not only needs to be continued, JCorp’s efforts to improve its market share President and Chief Executive, as well
but needs to be multiplied through in its four core businesses – agriculture, as JCorp’s Board of Directors who
Johor requires a strategic plan to act intelligently, swiftly expansion of business activities as well as specialist healthcare, property as well have led the new leadership within this
and in an organised way to face the post-COVID-19 era. the implementation of other important as food and restaurant services will also conglomerate.
development projects for the people. generate more revenue going forward.
We need to unify our expertise, energy, focus and I am confident that JCorp’s transformation
other resources to fulfil this mission and achieve the I have given and will always give my I have also witnessed JCorp’s many efforts will be emulated by other state
state’s vision. full support and cooperation towards achievements in the agriculture sector, development and investment agencies.
JCorp’s transformation that began in namely for the MD2 pineapple, Melita,
From the perspective of development, investment 2020. This transformation will be able to which has succeeded in penetrating the This initiative must also go hand-in-hand
and economic progress, the people should not be bring JCorp to a higher level at both the markets of multiple countries. In addition, with new futuristic ideas, innovation,
looking at topline numbers only, but also take part domestic and regional stage. downstream products such as tarts, improvements in governance, moral
in these activities to benefit from the spill-over effects jam, juice and fresh-cut fruits have also values, integrity and professionalism so
of economic prosperity. The idea to spread JCorp’s wings by been well-received in the market. that the Johor Prosperous agenda can be
riding the Industrial Revolution 4.0 to quickly achieved.
Through 34 industrial zones developed across the enter business and industry also cannot The government will also leverage on
state, JCorp has succeeded in providing 220,000 job be delayed further. JCorp’s expertise to help farmers and May Allah SWT ease our tasks and bless
opportunities. This is one of JCorp’s major contributions in growers succeed in its mission to plant our devoted efforts.
realising the Johor State Government’s agenda. The Internet as a platform for Del Monte pineapples which has the
technological business and the digital potential to produce excellent returns.
economy must be fully exploited in order
to create entrepreneurs for the new I also like to take this opportunity to Johor Corporation
DATUK HAJI HASNI BIN MOHAMMAD economy. heartily congratulate Yang Berbahagia 30 June 2020
Menteri Besar Johor Datuk Syed Mohamed Syed Ibrahim,
Johor Corporation Chairman
P6 P7
SECTION 1 SECTION 1
Corporate Statement Corporate Statement
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
CORPORATE
CORPORATE STATEMENT
STATEMENT
DRAMATIC JCORP IS NOW FOCUSING AND PREPARING THE
TRANSFORMATION TO ORGANISATION TO STEP INTO THE NEW DECADE WHILE
REMAIN SUSTAINABLE BRINGING JCORP TO A MUCH HIGHER LEVEL.
A HOST OF DEVELOPMENTS IN
OUR BUSINESS AND CORPORATE of its stakeholders. Currently, the global In line with this development, the Group
ACHIVEMENTS HAS COLOURED THE economy has been seriously impacted is being strengthened with various FINANCIAL
YEAR 2019 FOR JOHOR CORPORATION. by the COVID-19 outbreak, since systems and high-tech applications that PERFORMANCE 2019
CONCURRENTLY, THIS ECONOMIC January 2020 and it is now a global are able to improve the efficiency of data
REVENUE
INSTITUTION AND CHANGE AGENT health emergency that has disrupted the management and services in addition
to accelerating operational efficiency
FOR THE STATE HAS FACED FIERCE
CHALLENGES AND TAKEN DELIBERATE MAIN BUSINESSES
economy and global communities.
to provide a positive experience to our
RM6,007 million
STEPS TO ENSURE THE GROUP’S EXPLORING THE FIFTH CORE customers – a vital element to succeed in PROFIT BEFORE TAX
BUSINESS business now and in the future.
BUSINESS CONTINUES
TO BE RELEVANT AND
RM384 million
JCorp is now focusing and preparing At the same time, JCorp continues to
COMPETITIVE AS WELL PROFIT AFTER TAX
the organisation to step into the new strengthen its four core businesses
AS CAPABLE IN THE
MARKET. IN ADDITION, Kulim
decade while bringing JCorp to a much
higher level. The technology and digital
of plantations, property, health and
food through Kulim (Malaysia) Berhad
RM295 million
THE UNCERTAIN PG. 34 business is now being explored and built (Kulim), Johor Land Berhad (JLand),
GLOBAL POLITICAL AND up to become JCorp’s fifth core business KPJ Healthcare Berhad (KPJ Healthcare)
ECONOMIC CLIMATE to generate additional revenue. This and QSR Brands (M) Holdings Bhd
HAS IMPACTED BOTH transformation is aligned with global (QSR Brands) to remain dominant and
GLOBAL AND DOMESTIC trends that is essentially a computer in relevant in the marketplace.
ACTIVITIES. constant communication as part of a
sophisticated and perplexing system.
At the domestic level,
Specialist Look at the developments occurring with
Johor Corporation (JCorp) Healthcare the Industrial Revolution 4.0 (IR4.0) that is
was also affected. The main PG. 42
seeing automation, drones and robotics
factors were the effects of
taking over the roles of humans. Digital
the trade war between US
applications and wireless technology for
and China, in addition to
the fifth-generation cellular network (5G)
falling commodity prices in
powers the way life is conducted around
the world market, especially
the world now.
crude oil and crude palm oil.
This situation required JCorp
Property This fifth core business calls on JCorp
to drastically change its business PG. 58
to venture into the areas where we have
and operations, including
expertise. This involves products that
going into new portfolios to
are based on innovation and intellectual
generate new income in the
property, such as industrial and operations
future. This action is required
management, corporate responsibility
to enable JCorp to continue
management, the establishment of waqaf
its business and maintain its
and the commercialisation of certain
position in the market, while Food & Restaurant business and services modules.
upholding the confidence Services
PG. 48
P8 P9
SECTION 1 SECTION 1
Corporate Statement Corporate Statement
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
CORPORATE CORPORATE
STATEMENT STATEMENT
TRANSFORMATION & million, whereas net assets improved
ORGANISATIONAL STRUCTURE to RM1.45 billion compared to RM1.40
billion in the same period. Damansara
JCorp continues to place a high priority Assets Sdn Bhd recorded income of
on identifying risks in the market as well as RM158.6 million compared to RM133.7
its impact on business and stakeholders, million.
eventhough returns may be attractive
and profitable. In this context, JCorp will QSR Brands which drives the food
enter 2020 more cautiously, strategically business via KFC and Pizza Hut
and with unwavering wisdom. Reviews, demonstrated excellent performance.
corrections and audits are carried KFC Malaysia recorded revenue of
out to identify weaknesses, strengths, RM2.8 billion, growing by 2.2% on
potential or shortcomings in corporate the RM2.74 billion recorded last year.
governance, finances, procurement Pizza Hut, meanwhile, achieved
as well as operations, through their outstanding revenue growth for the 3rd
respective control measures. consecutive year with RM596 million,
a 6.6% increase compared to 2018.
With these changes and new The success of both these brands was
requirements, JCorp will not neglect the the result of dedicated commitment
skills of its employees in order to carry to strategy, branding, exciting product
out this transformation that is intended innovation and digital transformation for
to elevate JCorp’s honour and status to a customer convenience.
podium of excellence as Johor’s strategic
institution. ISLAMIC BUSINESS
from our role, vision and mission that is and food (QSR Brands) remains solid and
In accordance with Islamic teachings, clearly outlined in the Johor Corporation relevant as markets all over were plagued At the same time, the potential of Waqaf
JCorp emphasises the philosophy that Enactment No. 4, 1968 (Amendment No. by a variety of sentiments throughout An-Nur Corporation Berhad (WANCorp)
duty and responsibility must be carried 5, 1995). 2019. continues to be honed. The space and
out skilfully and with excellence. Thus, opportunities for WANCorp to leverage
JCorp’s core values and corporate Examples of the drastic steps taken Kulim remained resilient even though its potential, role and achievements have
culture have been streamlined to included reviewing and reorganising it was impacted by the decline in crude been identified. WANCorp will also be
strengthen the personalities of every the organisational structure and palm oil and palm kernel prices in directed to explore other new areas
employee who will need to be at their business plan to obtain optimal results, the international commodity market including the Islamic Business that will be
best for an organisation like JCorp. in addition to the implementation of throughout 2019. This scenario able to improve capabilities and earnings
Through this, JCorp is confident that the Transformation Plan 2020-2022 that was overcome through corporate to strengthen the socioeconomic agenda
the full commitment of its employees has succeeded and greatly impacted developments that strengthened its billion in 2019 compared to RM3.4 billion of the ummah.
will be able to move this development JCorp and Johor especially. Focus was foundations and optimised its portfolio. the year before, mainly contributed by
agency to succeed in its transformation, also given on how to mitigate economic Some of these actions included realising an increase in patient numbers. This Noting WANCorp’s achievements
that will bring JCorp to a higher level, weakness because of the effects of investments, exploring new business achievement was a result of an ongoing throughout 2019, we are confident it
to be sustainable and relevant while the health emergency post-COVID-19, sectors and strengthening the marketing strategy to increase the capacity of all is able to progress further. Besides its
contributing to the people’s well-being. as well as the new global landscape that of agribusiness products. hospitals in its network. main responsibility as JCorp’s corporate
has been redrawn. social responsibility arm, the scope of
To realise and achieve this transformation JCorp’s property development and WANCorp’s activities and programmes
goal, drastic actions through the CORE BUSINESS PERFORMANCE Meanwhile, KPJ Healthcare succeeded investment arm, JLand, faced a tepid which include religion, charity and
intelligence process – wise but firm, in increasing its revenue despite a market with Johor recording the highest society, education and entrepreneur
prudent with managed risk; have been The performance of our four core challenging business environment. level of unsold properties in the first half development will be reorganised,
taken by JCorp. This has been done businesses, plantations under Kulim, The network of specialist hospitals of 2019 at 18.8%. However, this did not strengthened and expanded.
without compromising or absconding property (JLand), health (KPH Healthcare) recorded revenue growth of 7% or RM3.6 prevent JLand from raking in revenue
of RM400 million compared to RM374
P 10 P 11
SECTION 1 SECTION 1
Corporate Statement Corporate Statement
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
CORPORATE CORPORATE
STATEMENT STATEMENT
appreciation and thanks to all, especially
the Johor State Government and the
JCORP IS READY TO OVERCOME EXTERNAL Federal Government, together with their
departments and agencies as well as
UNCERTAINTIES THAT HAVE BEEN AGGRAVATED BY THE other stakeholders including bank and
financial advisors on the commitment
ABNORMALITIES SET OFF BY THE DISRUPTION EDGE. given.
We also pay tribute and offer our thanks to
FACING CHALLENGES Iskandar, Bandar Dato’ Onn, Johor Bahru.
01 DYMM Sultan Johor inspecting the our customers, strategic partners, media
automated MD2 pineapple harvesting 02 DYMM Permaisuri Johor and our biggest stakeholders which
JCorp is ready to overcome external The Sultan of Johor also graced Kulim process at the Kulim Pineapple Farm. visiting patiens at the
Tunku Laksamana Johor
include our individual and institutional
uncertainties that have been aggravated Pineapple Farm Sdn Bhd, Ulu Tiram
Hermatology Ward, Hospital shareholders of the Group’s companies
by the abnormalities set off by the which was the final stopover location for Sultanah Aminah, Johor. - KPJ Healthcare, E.A. Technique Berhad,
disruption edge. The effect of 5G the Program Kembara Mahkota Johor
Al-Salam REIT and Al-‘Aqar Healthcare
technology and technological shock 2019 convoy on 22 July 2019. The Sultan
REIT; who have given or stated their
resulting from the game changers of of Johor also officiated the launch of
commitment to all our corporate plans,
artificial intelligence, robotics and drones Menara JLand at KOMTAR JBCC, on
investments and business transactions
has exceeded the logical boundaries 27 November 2019. received its MS ISO throughout 2019.
of mankind. These developments will 37001: 2016 Anti
constantly be monitored and analysed On 17 April 2019, The Queen of Johor Bribery Management This note would only be complete with
considering how these technologies officiated the launch of The Caring Systems (ABMS) our highest thanks and appreciation to
could dominate the world’s intelligence Home By Pizza Hut at Hospital Sultanah certification. Kulim the entire JCorp Board Members for all
through robots that are taking over Aminah, Johor Bahru. Prior to the event, was awarded Best their invaluable input and contributions,
human roles one by one. Like other His Royal Highness Tunku Mahkota of Annual Report be it in the form of guidance, wisdom or
entities, JCorp is faced with reputational, Johor officiated the handover of offer Of Non-Listed experience that they have accorded to
brand and image risk, as well as slander letters for Rumah Impian Bangsa Johor at Organisations while ensure that JCorp remains relevant.
and misinformation on social media Terminal Larkin Sentral on 3 March 2019. Kulim’s Laboratory
that is difficult to control. Therefore, this Unit received the It is clear and proven that the contributions
issue will be managed with speed and Meanwhile, JCorp and all its employees IKM Laboratory from all quarters have enabled JCorp
intelligence. would like to extend our heartfelt Excellence Award; to accelerate its operations on a strong
congratulations to YAB Datuk Hasni JCorp also acknowledges YB Dato’ KPJ Pasir Gudang Specialist Hospital platform that has the capability to
CORPORATE EVENTS Mohammad on his appointment as Ishak Sahari; YBhg Datuk Seri Dr Ismail received the International Hospital overcome challenges in a new phase of
Johor’s 18th Menteri Besar and JCorp’s Haji Bakar; YBhg Datuk Siti Zauyah Md Federation Award 2019; and JLand our corporate journey to a higher level at
There were numerous highlights and new Chairman. This mandate was last Desa; YBhg Dato’ Azman Mahmud; YBhg celebrated its recognition at the Malaysia the national and even regional stage.
corporate events colouring JCorp’s year held by YB Dato’ Dr Sahruddin Haji Jamal Datuk Dr Hafsah Hashim; YB Datuk Dr Property Awards 2019 for the categories
in 2019. Through this avenue, JCorp and JCorp would like to record our Shahruddin Md Salleh; and YBhg Datuk of International Real Estate Federation
would like to take this opportunity to deepest thanks and appreciation for his Ibrahim Ahmad for their guidance, and Master Plan.
express our utmost gratitude to His contributions. support, wisdom and expertise while on
Majesty The Sultan of Johor and Her JCorp’s Board of Directors. HEARTFELT TRIBUTE
Majesty The Queen of Johor for gracing JCorp and all its employees would
a number of ceremonies organised by also like to wish a warm welcome to I would also like to take this opportunity AWARDS & RECOGNITION Strong cooperation and staunch support
JCorp throughout the year. YB Tuan Amir Nasruddin; YBhg Dato’ Asri to acknowledge and offer our sincere of all our stakeholders has enabled
Hamidon; YBhg Dato’ Saiful Anuar Lebai thanks and gratitude to YB Dato’ Our corporate achievements are also JCorp to fulfil its role and carry out its
On 28 May 2019, His Majesty The Sultan Hussen; YBhg Datuk Nor Azri Zulfakar; Kamaruzzaman Abu Kassim, who led this measured through recognition and mandate while moving closer to its
of Johor, Her Majesty The Queen of Johor and YBhg Dato’ Sr Hisham Jafrey on institution from October 2010 until his awards from independent organisations goals. Thus, in representing JCorp and
and His Royal Highness Tunku Mahkota their appointments as new Directors on retirement in December 2019. and standard bearers. In 2019, JCorp the Group, I wish to extend my deepest
of Johor officiated Johor Corporation JCorp’s Board of Directors.
2019 breaking fast event at Masjid Sultan
P 12 P 13
SECTION 1 SECTION 2
Corporate Statement About Johor Corporation
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
CORPORATE
STATEMENT
CORPORATE PROFILE &
INFORMATION
Johor Corporation was established as a public enterprise and a statutory body
via Johor Corporation Enactment No. 4 , 1968 (Amendment No. 5 , 1995).
As a State-owned Conglomerate, Johor Corporation through its Group of
Registered Office Companies are involved in core businesses encompassing:
JOHOR CORPORATION
Level 11, Menara KOMTAR • Plantations – Kulim (Malaysia) Berhad.
Johor Bahru City Centre • Specialist Healthcare – KPJ Healthcare Berhad.
80000 Johor Bahru, Johor, Malaysia. • Property - TPM Technopark Sdn Bhd, TLP Terminal Sdn Bhd, Johor Land Berhad,
Telephone : +607-219 2692 Damansara Assets Sdn Bhd, Al-‘Aqar Healthcare REIT and Al-Salām REIT.
Fax : +607-223 3175 • Food & Restaurant Services – QSR Brands (M) Holdings Bhd.
Email : enquiries@jcorp.com.my
Johor Corporation is a domestic market leader in a number of core businesses
and has expanded its operations overseas.
Branch Office
The Plantations Business owns operations and interests in:
JOHOR CORPORATION
• Malaysia: 50,851 hectares.
CAWANGAN KUALA LUMPUR
• Indonesia: 14,511 hectares.*
Level 11, Menara JCorp
(*Area granted under Right of Exploitation (HGU)).
No 249 Jalan Tun Razak
50400 Kuala Lumpur, Malaysia.
Telephone : +603-2787 2692
Fax : +603-2787 2700 Specialist Healthcare business spearheaded by KPJ Healthcare Berhad, has
expanded to:
• Jakarta, Indonesia.
ACKNOWLEDGEMENTS • Brisbane, Australia.
Auditor
Ernst & Young • Bangkok, Thailand.
Thanks, congratulations and a deep Level 23A, Menara Milenium, • Dhaka, Bangladesh.
appreciation must go out to our 62,000 Jalan Damanlela
employees of the JCorp Group that are Pusat Bandar Damansara,
totally committed, dedicated, capable Kuala Lumpur, 50490, Malaysia.
and hardworking to fulfil the mandate Food & Restaurant Services have spread from Malaysia to:
that has been given. They have served
while holding firm to our core values, • Singapore (KFC & Pizza Hut).
corporate culture values, integrity and Principal Banker • Brunei (KFC).
MAYBANK • Cambodia (KFC).
compliance to corporate governance
Lot M1-22, 106-108 City Square
procedures. Our ongoing transformation
Jalan Wong Ah Fook
can only succeed with the support of
80000 Johor Bahru, Johor, Malaysia.
each and every employee as they are the
Four listed companies on Bursa Malaysia:
source of JCorp’s strength that will push
us through new economic challenges
to achieve our vision and mission – • KPJ Healthcare Berhad.
• E.A. Technique (M) Berhad.
Membina dan Membela
• Al-‘Aqar Healthcare REIT.
• Al-Salām REIT.
Johor Corporation
30 June 2020
P 14 P 15
SECTION 2 SECTION 2
About Johor Corporation About Johor Corporation
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
CORPORATE
CORPORATE STRUCTURE
STRUCTURE
51% Kumpulan 100% 36.14% 96.07%
Lablink (M)
Perubatan (Johor)
Sdn Bhd
Sdn Bhd
100% 100% 80%
38.61%
100%
65% Point Zone (M) 100% Mahamurni
EPA Management Kulim Energy
Sdn Bhd Plantations
Sdn Bhd Sdn Bhd
2.56% Sdn Bhd
75% 75%
Business 50.60%
100% Massive Equity 56% 100%
Chronicles
Sdn Bhd
Sdn Bhd
100%
77.62% SPMB Holdings 100%
100%
Sdn Bhd
48.02% 4.21%
100% 100%
N2W 100% 11.82% Bukit Damansara
Corporation Development
Sdn Bhd Sdn Bhd
100% 88.18%
100% 100% 100%
100%
Ibrahim Bandar Baru
60% International Johor City
Majidee
Business District Development
Development
(Johor) Sdn Bhd Sdn Bhd
Sdn Bhd
75% 100% 100%
Plantation Specialist Food & Property Intrapreneur Shipping Port/Logistic Industry Intrapreneur Investment WANCorp/ Significant Management Real Estate
Healthcare Restaurant Development Holding OBA Direct Holding Investment Trust
Services (REIT)
P 16 P 17
SECTION 2 SECTION 2
About Johor Corporation About Johor Corporation
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
BOARD of DIR ECTORS’ Profile
DATUK HAJI
HASNI BIN DATO’ HAJI
TAN SRI DR ALI AZMI BIN
MOHAMMAD BIN HAMSA DATO’ HAJI A. RAHIM
Chief Minister of Johor
Deputy Chairman
ROHANI
Chairman Johor Corporation Johor Corporation
State Secretary of Johor BIN HAJI NIN
Appointed Director of Johor State Financial Officer of Johor
He was appointed as Chairman of Johor He was appointed the Director of
Corporation effective 1 January Appointed Director of Johor Corporation representing the
Corporation Board of Directors effective Johor Corporation effective
2017. He holds a Bachelor State Government effective 20 October 2017. He holds
28 February 2020. He holds a Bachelor 1 November 2009. Beginning
of Science (Human Resource a Bachelor of Arts (Hons) in Economics from Universiti
of Science in Civil Engineering from 15 June 2020, he was appointed
Development) from Universiti Kebangsaan Malaysia. He is currently the State Financial
the University of Missouri, Rolla, United the Deputy Chairman as well as
Teknologi Malaysia obtained Officer of Johor.
Independent Director of Johor
States of America. He is now the Chief in 2004 and a Bachelor of
Corporation. He holds a Philosophy
Minister of Johor. Development (Economic and
Doctorate (PhD) from Oklahoma State
Management) from Universiti
University in 1997, MS (Economics)
Kebangsaan Malaysia obtained
from Oklahoma State University in
in 1990. He is currently the State
1986, B.A (Hons) from University of
Secretary of Johor.
Malaya in 1979 and Diploma in Public
Management from INTAN in 1980.
DATUK SYED
MOHAMED BIN
SYED IBRAHIM TUAN
President & Chief Executive AMIR BIN
Johor Corporation
He was appointed President & Chief
NASRUDDIN
State Legal Advisor of Johor
Executive and Director of Johor
Corporation effective 9 Januari 2020. He was appointed Director of
He holds a Degree in Economic
Johor Corporation effective
Analysis from Universiti Malaya and
continued with the Senior Management 1 January 2020. He obtained
Development in Public Enterprise a Diploma in Law and an
programme in Harvard University. Advanced Diploma in Law (LLB
He is also Chairman and Board Director Honours) from Institut Teknologi
of Prasarana Integrated Development
Sdn Bhd, Board Director of Yayasan MARA in 1994. He is currently
Sultan Ibrahim Johor, Yayasan Kanser the State Legal Advisor of Johor.
Tunku Laksamana Johor and Iskandar
Seafront Assets Sdn Bhd. Prior to this,
he was the Chairman of FELDA
Investment Corporation; President
& Executive Chairman of Iskandar
Waterfront Holdings Sdn Bhd. He is
also a Board Director for Yayasan Sultan
Ibrahim Johor and Yayasan Kanser
Tunku Laksamana Johor.P 18 P 19
SECTION 2 SECTION 2
About Johor Corporation About Johor Corporation
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
BOARD OF DIRECTORS’ BOARD OF DIRECTORS’
PROFILE PROFILE
DATO’ SAIFUL DATO’ SR.
ANUAR HISHAM BIN
DATO’ ASRI BIN BIN LEBAI JAFREY
HAMIDON HUSSEN
Managing Director, ARH
Jurukur Bahan Sdn Bhd
Treasury Secretary-General
Ministry of Finance
Secretary General, Ministry of Appointed Director of Johor NURALIZA BINTI
Economic Affairs
Board of Directors Johor Corporation
Appointed Director of Johor
Corporation effective 1 May
2020. He holds a degree in
ABDUL RAHMAN
He was appointed the Director of Johor Quantity Surveying from the Assistant Secretary
Corporation effective 1 October
Corporation effective 15 Jun 2020. He has Leeds Metropolitan University, She was appointed as Johor Corporation Assistant
2019. He holds a Bachelor of
a Bachelor’s Degree in Economics from United Kingdom. He is a Fellow of Secretary on 1 March 2020. She has a Professional
Economics (Development) from
the Hiroshima University, Japan. Prior to the Royal Institution of Surveyor Degree from the Institute of Chartered Secretaries
Universiti Kebangsaan Malaysia.
this, he was the Treasury Deputy Secretary- Malaysia and a Member of the and Administrators (ICSA)(UK). She began serving
Prior to this, he held the position
General (Policy). He is now the Treasury Royal Institute of Chartered in Johor Corporation from 1 October 1997.
of Deputy Secretary-General
Secretary-General. Surveyors, United Kingdom. She currently holds the position of Company
(Management) at the Ministry of
Health. He is currently the Director- In addition, he is also on the Secretary Department Head, Johor Corporation.
General, Economic Planning Unit, Industry Member Advisory Panel of
Prime Minister’s Department. SEGi University.
DATUK NOR
AZRI BIN MOHD
ZULFAKAR NORDIN
Director-General,
Implementation and JAMALUDIN
Coordination Unit, Secretary Johor Corporation
Prime Minister’s Office He was appointed Secretary
Appointed Director of Johor of Johor Corporation effective
Corporation effective 8 March 2 February 2020. He holds
2020. He holds a Degree a Bachelor of Law from the
in Business Administration University of West London,
(Financial Management) from United Kingdom. He began
the Massachusetts Institute of serving with Johor Corporation
Technology (MIT), Cambridge on 2 February 2020. He currently
Massachusetts, United States of holds the position of Head
America. Prior to this, he was a of Corporate Services,
Board Director for the Penang Johor Corporation.
Regional Development Authority
(PERDA).P 20 P 21
SECTION 3 SECTION 3
Financial Review Financial Review
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
STATEMENTS OF COMPREHENSIVE INCOME
STATEMENTS OF FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
Group Corporation Group Corporation
2019 2018 2019 2018 2019 2018 2019 2018
Note Restated Restated Restated Restated
Continuing operations Other comprehensive income, to be reclassified to
Revenue 4 6,007 5,657 566 460 profit or loss in subsequent periods:
Cost of sales (4,217) (3,967) (155) (194) Foreign currency translation of foreign
operations 5 46 - -
Gross profit 1,790 1,690 411 266
Other comprehensive income/(loss), not to be
reclassified to profit or loss in subsequent periods:
Other items of income
Fair value adjustment for financial assets at
Other income 5 381 376 112 370 FVOCI (4) (199) - -
Fair value adjustment for financial assets at
Other items of expense FVOCI in relation to disposal of subsidiary 99 - - -
Distribution expenses (43) (54) (1) (1) Net surplus from revaluation of property, plant
and equipment 42 89 - -
Administrative expenses (1,220) (1,144) (155) (136)
Surplus on transfer of property, plant and
Other expenses 6 (178) (147) (68) (194)
equipment to investment property 5 - - -
Finance costs 7 (470) (451) (137) (152)
Disposal of property, plant and equipment (6) - - -
Share of results of associates, net of tax 27 27 - -
Other comprehensive income/(loss), for the financial
Share of results of joint ventures, net of tax 97 91 - -
year, net of tax 141 (64) - -
Profit before tax from continuing operations 8 384 388 162 153
Total comprehensive income for the financial year 429 148 164 159
Tax 11 (89) (172) 2 6
Profit attributable to:
Profit from continuing operations, net of tax 295 216 164 159
Owner of the Corporation 101 62 164 159
Non-controlling interests 187 150 - -
Discontinued operations
Loss from discontinued operations, net of tax 12 (7) (4) - - 288 212 164 159
Profit net of tax 288 212 164 159 Total comprehensive income attributable to:
Owner of the Corporation 217 (99) 164 159
Non-controlling interests 212 247 - -
429 148 164 159P 22 P 23
SECTION 3 SECTION 3
Financial Review Financial Review
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
STATEMENTS OF FINANCIAL POSITION
STATEMENTS OF FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
FINANCIAL POSITION
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
Group Corporation Group Corporation
31.12.2019 31.12.2018 01.01.2018 31.12.2019 31.12.2018 01.01.2018 31.12.2019 31.12.2018 01.01.2018 31.12.2019 31.12.2018 01.01.2018
Note Restated Restated Restated Restated Note Restated Restated Restated Restated
ASSETS EQUITY AND LIABILITIES
Non-current assets Current liabilities
Property, plant and equipment 13 8,928 10,601 10,569 352 597 529 Current tax liabilities 35 34 63 - - -
Right-of-use assets 14 2,079 - - 253 - - Lease liabilities 30 47 - - 6 - -
Inventories 15 493 737 759 34 261 365 Loans and borrowings 31 2,123 2,635 2,307 3 807 11
Investment properties 16 4,704 4,265 3,549 1,982 1,875 1,499 Trade and other payables 32 2,119 1,788 2,022 1,164 391 1,058
Biological assets 17 - 2 1 - - - Contract liabilities 26 95 78 20 12 - -
Intangible assets 18 251 252 250 - - - Derivative financial instrument 27 3 2 2 - - -
Investment in subsidiaries 19 - - - 3,378 3,151 3,327 4,422 4,537 4,414 1,185 1,198 1,069
Investment in associates 20 300 282 268 4 4 4 Liabilities directly associated with disposal
Investment in joint ventures 21 1,760 1,701 1,583 - - - group classified as held for sale 29 - 180 203 - - -
Deferred tax assets 22 210 171 170 148 118 82 4,422 4,717 4,617 1,185 1,198 1,069
Financial assets at Fair Value through Net current assets/(liabilities) 64 (57) (236) 234 221 188
Other Comprehensive Income Non-current liabilities
("FVOCI") 23(a) 28 20 215 - - -
Trade and other payables 32 442 439 271 1,067 1,100 378
Financial assets at Fair Value through
Other long term liabilities 33 1,227 1,235 1,056 958 934 783
Profit or Loss (“FVTPL”) 23(b) 2 - - - - -
Deferred tax liabilities 22 789 808 772 266 241 211
Trade and other receivables 25 40 23 65 - - -
Loans and borrowings 31 7,272 6,642 6,387 1,789 1,808 2,609
18,795 18,054 17,429 6,151 6,006 5,806
Lease liabilities 30 81 - - 16 - -
Current assets
9,811 9,124 8,486 4,096 4,083 3,981
Inventories 15 1,592 1,314 1,346 900 665 707
Total liabilities 14,233 13,841 13,103 5,281 5,281 5,050
Biological assets 17 29 21 31 - - -
Net assets 9,048 8,873 8,707 2,289 2,144 2,013
Contract costs 24 7 2 4 - - -
Equity
Trade and other receivables 25 1,017 1,078 1,194 159 290 143
Capital reserves 34(a) 391 392 392 55 55 55
Contract assets 26 134 129 61 39 76 -
Asset revaluation reserve 34(b) 159 149 123 - - -
Financial assets at Fair Value through
Profit or Loss ("FVTPL") 23(b) 5 4 5 21 20 56 Currency fluctuation reserve 34(c) 9 (66) (43) - - -
Tax recoverable 118 83 68 1 4 4 FVOCI reserve 34(d) (99) (95) 69 - - -
Cash and bank balances 28 1,136 1,239 877 116 119 30 Revenue reserve 34(e) 6,058 6,066 5,913 2,234 2,089 1,958
4,038 3,870 3,586 1,236 1,174 940 6,518 6,446 6,454 2,289 2,144 2,013
Assets of disposal group classified as held Non-controlling interests 2,530 2,427 2,253 - - -
for sale 29 448 790 795 183 245 317 Total equity 9,048 8,873 8,707 2,289 2,144 2,013
4,486 4,660 4,381 1,419 1,419 1,257 Total equity and liabilities 23,281 22,714 21,810 7,570 7,425 7,063
Total assets 23,281 22,714 21,810 7,570 7,425 7,063P 24 P 25
SECTION 3 SECTION 3
Financial Review Financial Review
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
STATEMENTS OF CASH FLOWS
STATEMENTS OF FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 Group Corporation
2019 2018 2019 2018
Restated Restated
Group Corporation
2019 2018 2019 2018 Changes in working capital
Restated Restated
Inventories (39) (158) (11) (156)
OPERATING ACTIVITIES Receivables 54 505 (48) 213
Profit before tax: Contract assets (5) (68) - -
Continuing operations 384 388 162 153 Payables 239 (226) 984 234
Discontinued operations (8) (5) - - Contract liabilities 15 58 - -
Adjustments: Associates and joint ventures 42 (5) - -
Property, plant and equipment:
Cash generated/(used in) from operations 1,371 1,064 917 219
Net gain on disposal (10) (31) - -
Tax refunded 45 8 3 -
Written off 4 1 - -
Tax paid (205) (223) (3) -
Depreciation 391 426 6 23
Impairment loss 10 29 2 -
Net cash generated from operating activities 1,211 849 917 219
Right-of-use assets
Depreciation 70 - 22 - INVESTING ACTIVITIES
Investment properties: Proceeds from disposal of investment in:
Changes in fair value (165) (65) (74) (183)
Subsidiaries - - - 52
Net loss/(gain) on disposal - 1 - 5
Financial assets at fair value through profit or loss - 5 - -
Biological assets:
Acquisition of additional interest in subsidiaries - (2) (17) (60)
Changes in fair value (2) 7 - -
Dividend received from subsidiaries 2 5 280 212
Gain on disposal of:
Dividend received from associates 11 13 - -
Subsidiaries (1) - - (43)
Adjustment on initial recognition of MFRS 16 - - 1 -
Associates (2) - - -
Interest received 32 45 11 8
Asset held for sales - (71) - -
Financial assets through profit or loss: Property, plant and equipment:
Changes in fair value (1) 1 (1) 44 Proceeds from disposal 24 190 - 5
Allowance for impairment : Purchase (606) (617) (37) (3)
Joint venture 43 - - - Right of use asset:
Subsidiaries - - - 48 Purchase (15) - - -
Intangible assets: Investment properties:
Written off - 1 - - Purchase (195) (428) (11) (10)
Amortisation and impairment 12 5 - - Biological assets:
Dividend income (2) (5) (280) (212) Proceeds from disposal 3 6 - -
Unrealised foreign currency exchange loss/(gain) (3) 10 - -
Purchase (7) (4) - -
Amortisation:
Intangible assets:
Government grant (14) (16) (7) (7)
Proceeds from disposal - 3 - -
Land lease rental (15) (14) (11) (11)
Purchase (15) (11) - -
Allowance for impairment of trade and other receivables 70 12 56 9
Purchase of:
Reversal of impairment for trade and other receivables (10) (4) (9) (42)
Financial assets at fair value through other comprehensive income (41) - - -
Interest expense 470 451 137 152
Financial assets at fair value through profit or loss (1) (5) - (42)
Interest income (32) (45) (11) (8)
Share of results of associates and joint ventures (124) (118) - - Investment in joint venture (47) (27) - -
Operating profit/(loss) before changes in working capital 1,065 958 (8) (72) Increase in deposits with licensed bank with maturity of more than
3 months (77) (93) - -P 26 P 27
SECTION 3 SECTION 3
Financial Review Financial Review
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
STATEMENTS OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
STATEMENT OF CHANGES
IN EQUITY
Group Corporation
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
2019 2018 2019 2018
Restated Restated
(187)
(1)
(6)
(4)
(119)
(119)
(18)
(253)
Total
equity
9,060
8,873
8,872
288
42
5
99
5
141
429
2
1
9,048
INVESTING ACTIVITIES (CONTINUED)
Government grant received 21 15 14 10
Net cash inflow on disposal group classified as held for sale - 181 - 91
(4)
(6)
(119)
(1)
(109)
Non-
controlling
interests
2,427
-
2,427
-
2,427
187
35
-
-
-
25
212
8
3
-
2,530
Net cash flows (used in)/generated from investing activities (911) (724) 241 263
FINANCING ACTIVITIES
Drawdown of term loans and other long term borrowings 2,846 1,544 - -
(187)
(1)
(2)
(4)
(118)
(6)
(2)
(18)
(144)
Total
6,633
6,446
6,445
101
7
5
99
11
116
217
-
6,518
Repayment of term loans and other long term borrowings (2,799) (955) (809) (5)
Repayment of the lease liabilities (24) - (8) -
Repayment to subsidiaries - - (199) (224)
Advances from non-controlling interest of subsidiaries,
(187)
(1)
(181)
(6)
(2)
(18)
(207)
Revenue
reserve
6,253
6,066
6,065
101
-
-
-
-
99
-
99
200
-
6,058
net of repayments - (5) - -
Proceed from dilution of interest in subsidiary - 120 - -
Disposal of subsidiary 3 - - -
(95)
(95)
(95)
(4)
(4)
(4)
(99)
FVOCI
reserve
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Interest paid (470) (451) (77) (112)
Interest paid to subsidiaries - - (60) (40)
Dividend paid to non-controlling interests (119) (104) - -
(66)
(66)
(66)
Currency
fluctuation
reserve
-
-
-
-
-
-
-
-
11
11
11
-
64
-
-
-
64
9
Distribution of fund to State Government (8) (12) (8) (12)
Designated account (34) (17) - -
Net cash used in financing activities (605) 120 (1,161) (393)
(2)
Net change in cash and cash equivalents (305) 245 (3) 89
Asset
revaluation
reserve
149
-
149
-
149
-
7
5
-
-
-
10
10
-
-
-
-
-
-
159
Cash and cash equivalents at 1 January 866 607 119 30
Effect of exchange rate changes on cash and cash equivalents 7 14 - -
Cash and cash equivalents at 31 December 568 866 116 119
(1)
(1)
Capital
reserves
392
-
392
-
392
-
-
-
-
-
-
-
-
-
-
-
-
-
391
CASH AND CASH EQUIVALENTS
Cash and bank balances 761 834 100 27
Fixed deposits 375 405 16 92
Note
23(a)
43
13
16
1,136 1,239 116 119
Bank overdrafts (213) (129) - -
Disposal of property, plant and equipment
Fair value adjustment for financial assets in
Revaluation surplus on property, plant and
At 1 January 2019 (as previously reported)
Dividend paid to non-controlling interests
Deposit with licensed bank with maturity of more than 3 months (203) (126) - -
Surplus on transfer of property, plant and
Closing balance at 31 December 2019
Fair value adjustment for financial assets
equipment to investment properties
Adjusted balance as at 1 January 2019
Total other comprehensive loss for the
Foreign currency translation of foreign
Designated account (152) (118) - -
Total comprehensive income for the
relation to disposal of subsidiary
Accretion of interest in subsidiaries
Dilution of interest in subsidiaries
568 866 116 119
Distribution to State Government
Other comprehensive income
At 1January 2019 (restated)
Transaction with owner
Disposal of subsididary
Prior year adjustment
Effect of MFRS 16
financial year
financial year
Profit net of tax
equipment
operations
at FVOCI
Group
2019P 28 P 29
SECTION 3 SECTION 3
Financial Review Financial Review
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
STATEMENT OF CHANGES IN EQUITY STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
Asset Currency Non- Asset
Capital revaluation Revenue Total
2018 Capital revaluation fluctuation FVOCI Revenue controlling Total
Corporation Note reserves reserve reserve equity
Group Note reserves reserve reserve reserve reserve Total interests equity
At 1 January 2019 (as previously reported) 55 - 2,223 2,278
At 1 January 2018 392 123 (43) 69 6,063 6,604 2,253 8,857 Prior year adjustment 43 - - (134) (134)
Prior year adjustment 43 - - - - (150) (150) - (150) At 1 January 2019 (restated) 55 - 2,089 2,144
Effect of MFRS 16 44 - - (1) (1)
At 1 January 2018 (restated) 392 123 (43) 69 5,913 6,454 2,253 8,707
Adjusted balance as at 1 January 2019 55 - 2,088 2,143
Effect of MFRS 9 - - - - 4 4 - 4 Profit net of tax - - 164 164
Adjusted balance as at 1 January 2018 392 123 (43) 69 5,917 6,458 2,253 8,711 Distribution to State Government - - (18) (18)
Total comprehensive income for the financial year 55 - 2,234 2,289
Profit net of tax - - - - 62 62 150 212
Closing balance at 31 December 2019 55 - 2,234 2,289
Other comprehensive income
Revaluation surplus on property, Asset
plant and equipment 13 - 26 - - - 26 63 89 Capital revaluation Revenue Total
Note reserves reserve reserve equity
Fair value adjustment for financial
assets at FVOCI - - - (164) - (164) (35) (199) At 1 January 2018 (as previously reported) 55 118 1,814 1,987
Foreign currency translation of foreign Prior year adjustment 43 - - (120) (120)
operations - - (23) - - (23) 69 46 Effect of MFRS - (118) 264 146
At 1 January 2018 (restated) 55 - 1,958 2,013
Total other comprehensive income for
Effect of MFRS 9 - - (28) (28)
the financial year - 26 (23) (164) - (161) 97 (64)
Adjusted balance as at 1 January 2018 55 - 1,930 1,985
Total comprehensive income for the
Profit net of tax - - 159 159
financial year - 26 (23) (164) 62 (99) 247 148
Total comprehensive income for the financial year 55 - 2,089 2,144
Transaction with owner Closing balance at 31 December 2018 55 - 2,089 2,144
Dividend paid to non-controlling
interests - - - - - - (104) (104)
Accretion of interest in subsidiaries - - - - 33 33 (35) (2)
Dilution of interest in subsidiaries - - - - 54 54 66 120
- - - - 87 87 (73) 14
Closing balance at 31 December
2018 392 149 (66) (95) 6,066 6,446 2,427 8,873
Please scan the QR Code
above to view the full pdf
version of financial report
online.P 30 P 31
SECTION 3 SECTION 3
Financial Review Financial Review
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
FINANCIAL PERFORMANCE SUMMARY
FINANCIAL PERFORMANCE JCORP & GROUP (2015-2019)
SUMMARY
JCORP & GROUP (2015-2019) LEGEND
LEGEND JCorp GROUP
JCorp GROUP
REVENUE TOTAL ASSETS
566 6,007 6,643 23,281
2019 2019
460 5,657 7,244 22,714
2018 2018
245 5,564 7,063 21,810
2017 2017
288 5,355 7,425 21,080
2016 2016
574 5,306 7,570 20,606
2015 2015
PROFIT BEFORE TAX TOTAL LIABILITIES
162 384 5,281 14,233
2019 2019
153 388 5,281 13,841
2018 2018
93 583 5,050 13,103
2017 2017
112 541 5,275 13,293
2016 2016
262 499 4,773 11,406
2015 2015
PROFIT AFTER TAX TOTAL EQUITY
164 295 2,289 9,048
2019 2019
159 216 2,144 8,873
2018 2018
94 471 2,013 8,707
2017 2017
120 415 1,969 7,787
2016 2016
206 381 1,870 9,200
2015 2015P 32 P 33
SECTION 4 SECTION 4
Prospects Prospects
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
ECONOMIC
ECONOMIC REVIEW
REVIEW
ECONOMIC REVIEW 2019 MALAYSIA’S GROSS DOMESTIC PRODUCT (GDP) RECORDED
After hovering in the range of 4.0-5.0% sectors that grew 3.8% and 0.1%
A SHARP DECLINE TO 3.6% IN THE FOURTH QUARTER OF 2019,
over the last six consecutive quarters respectively. The construction LEADING TO 2019’S GDP GROWTH OF ONLY 4.3%.
since the second quarter of 2018, sector’s marginal growth was
Malaysia’s Gross Domestic Product because of the completion
(GDP) recorded a sharp decline to 3.6% of large-scale projects, with
2020 ECONOMIC PERSPECTIVE US-China trade war that is still being felt response of the whole world to ease
in the fourth quarter of 2019, leading fewer new projects which are
until now with signs that it may erupt monetary policy and implement stimulus
to 2019’s GDP growth of only 4.3%. mostly smaller scale and an
The year 2020 began encouragingly again, and the fall of the crude oil market packages during the first half of 2020
In line with Malaysia’s slowest economic oversupply of real estate.
where the worst market scenario by due to the price war between Saudi is expected to strengthen the recovery
growth since 2009, the world economy Although the services and
consensus expected the weakness in the Arabia and Russia. of global growth by the end of 2020 or
and global trade only expanded 2.9% manufacturing sector were
second half of 2019 to continue into the by early 2021. In line with the forecast
(2018: 3.6%) and 1.0% (2018: 3.7%), the biggest contributors to
first half of 2020, whereas a clear rebound The dramatic decline in the economy in of economic recovery in 2021, Malaysia
respectively. This clearly demonstrated overall GDP growth, it also
was seen in the second half of 2020 as the first quarter of 2020 due to the rapid is also expected to return to a positive
that Malaysia was impacted by external experienced a deceleration
a result of the easing of interest rates spread of COVID-19 since early March growth trajectory.
pressures throughout 2019. due to weak global
around the world and a more relaxed 2020 which forced the implementation
demand for manufactured
financial market. However, what was of the MCO and its variants. This was As of now, cuts to the OPR have
This included global trade tensions and items and household
earlier considered a local issue for China, compounded by the repeated supply amounted to 100 basis points, bringing it
an increase in protectionist rhetoric that spending returning
led to the outbreak of the COVID-19 disruptions in the commodity sector to 2.0% and with four stimulus packages
was not limited to the US and China; an to more appropriate
pandemic, a black swan event that was as well as the risk of being collateral totalling RM295 billion, it is hoped that
increase in geopolitical risk in the Middle levels compared
acknowledged as a global pandemic on damage in the price war between Saudi this will reduce the economic impact of
East, Eastern Europe, South Asia and the to 2018’s unusual
11 March 2020. Arabia and Russia, and the local political COVID-19.
Asia-Pacific; the uncertainty of economic, performance.
instability continuing to impact Malaysia’s
social, political and international relations
Meanwhile, the equity market based on Since then, the majority of the world’s economy negatively. BNM has also forecasted average
between Europe and Britain as a result As a result of the supply disruptions
the Bursa Malaysia Composite Index countries have had to institute lockdowns inflation growth of between -1.5%
of Brexit, and the economic impact in commodity output in 2018, the first
(KLCI) was trapped in a downward trend, and all kinds of social distancing While there is a wide range of views for and 0.5% for 2020 considering the
of climate change aside from several half of 2019 witnessed the resurgence
declining by 6% and closing at 1,588.8 protocols to stem the spread, resulting in Malaysia’s economic prospects in 2020, downward pressure on prices in general,
internal speed-bumps in growth trends. of the agricultural and mining sectors,
points (2018: -5.9% and 1,690.6 points) the world grinding to a halt. This global BNM’s official forecast of -2.0% to +0.5% largely mirroring the prospects of low
especially palm oil and natural gas.
at the end of 2019 due to outflows health crisis and critical steps taken to is the least pessimistic, although the crude oil prices and other commodities
In fact, domestic demand growth However, this all changed in the second
by foreign investors (-RM6.7 billion). stop the outbreak at both the global and likelihood that it will be a recession that is in the global market, as well as muted
moderated at 4.3% due to lack of half of 2019 when there were supply
However, the Ringgit ended the year local level has led to a global recession worse than the Global Financial Crisis of aggregate demand. With the focus on
support from the main driver of growth, disruptions as a result of plant closures
stronger by 1.1% to RM4.0925 compared and a simultaneous supply and demand 2008-2009 cannot be discounted. strengthening the support for economic
the private sector. This contraction in and maintenance activities that affected
to the US dollar. The average price of shock due to weak final demand and recovery, low inflationary pressures
gross fixed capital formation caused the output of crude oil and natural gas
palm oil and crude oil (Brent), two global disruption in the supply chain. Therefore, the prospects for global that could threaten deflation permits a
by the shrinkage in public sector resulting in the mining sector continuing
commodities that has a direct impact on growth depend on how quickly the more accommodative monetary policy
investments and a slowdown in private its contraction trend. The lagged impact
Johor Corporation declined in 2019 with Based on the latest forecasts from the virus can be contained and eventually through further cuts to the OPR, to as
sector investments growth was the main due to the drought and less fertiliser
palm oil at RM2,119/metric ton (2018: International Monetary Fund (IMF) and stopped, as well as the shape, scope and low as 1.5%, which would be the lowest
reason Malaysia recorded its slowest application in early 2019 affected palm
RM2,235/metric ton) and crude oil at World Bank (WB), the global economy scale of the various follow-up measures in history, or further cuts to the Statutory
GDP growth since 2009. oil production, the main cause of the
US$64.37/per barrel (2018: US$71.19/ is expected to contract by 3.0% to for cross-border travel to control the Reserve Rates of 2.0% currently. All this
decline in its recovery, although this was
per barrel). 5.2%. Some of the other contributors spread of the pandemic and to reduce is to ensure the Malaysia’s real GDP
In terms of the supply side, the offset by the agriculture sector which
to this global recession which has the multi-dimensional negative effects does not take too long to return to its
decline in GDP growth was mainly recorded growth of 2.0% (2018: 0.1%).
been regarded as unprecedented and with monetary and fiscal stimulus during long-term potential growth output
contributed by the loss of momentum
unparalleled include the effects of the and post-COVID-19. The economic estimated at between 4.3% and 4.8%.
in the manufacturing and constructionP 34 P 35
SECTION 4 SECTION 4
Prospects Prospects
Johor Corporation / Annual Report 2019 Johor Corporation / Annual Report 2019
KULIM
KULIM BUSINESS
BUSINESS in Indonesia valued at RM44.03 million,
and set aside an allocation for expected REVENUE
losses from a litigation case involving EA
Tech and Malaysia Marine and Heavy RM1.21 billion
THE YEAR 2019 HAS BEEN Engineering amounting to RM45.28
million. Despite this, the Group’s cashflow OIL & GAS REVENUE
ANOTHER CHALLENGING
PERIOD FOR KULIM
remains strong.
RM307.52 million
(MALAYSIA) BERHAD (KULIM) At the same time, the Intrapreneur
CPO PRICE
Venture (IV) Division recorded revenue
AS THE LOW PRICES OF
CRUDE PALM OIL (CPO) AND
of RM37.63 million, 21.49% less than the
RM47.93 million in 2018. This Division
RM2,181 average
PALM KERNEL (PK) IMPACTED recorded profit before tax of RM0.25
million in 2019 compared to RM1.24 On 13 February 2019, the disposal of
THE GROUP’S EARNINGS. million the year before. a 75% equity stake in Optimum Status
Sdn Bhd (OSSB) which is owned by EPA
The Oil & Gas Division recorded revenue Management Sdn Bhd to IV Kulim or Kulim
However, Kulim has remained resilient
of RM307.52 million, falling by 34.56% Safety Strategy Training and Services Sdn
with a host of initiatives to optimise the
from the RM469.92 million achieved the Bhd was successfully completed. This
potential value of our business segments.
year before. This Division recorded losses disposal is in line with our strategy to
The Palm Oil Plantation business is still
before tax of RM92.51 million compared transform KSTS into a health, safety and
the main contributor to revenue despite
to profit before tax of RM73.91 million environment management company.
the uncertain price environment for
the year before.
CPO and PK, European Union sanctions
On the 1 May 2019, Kulim stopped
towards palm oil use, high inventories
Although facing challenges in balancing operations of EPASA Shipping Agency
and lower CPO exports to other main
investments against creditors and Sdn Bhd and turned it into a dormant
markets. Our operations were also
cash flow, Kulim remains committed to company (not active).
affected by worker shortages and the
delivering value to our shareholders.
rising cost of labour.
In line with this, the Board of Directors Following this, on 7 May 2019, Kulim
have approved a dividend payment of acquired the 25% stake belonging to
From a financial perspective, the
RM200 million for the year 2019. Intrapreneur in Renown Value Sdn Bhd.
Group’s revenue declined to RM1.21
This step was to increase Kulim’s revenue
billion as of end-December 2019
CORPORATE DEVELOPMENTS through stronger MD2 pineapple farming
compared to RM1.39 billion
by paying close attention and having full
recorded in 2018. The decline
In 2019, Kulim continued to streamline control of the pineapple business.
was caused by the 35%
all its portfolio assets in an effort to
reduction in revenue from
strengthen the company’s operations On 1 October 2019, Kulim and MTC Orec
EA Technique (M) Berhad
as well as ensure optimum revenue Sdn Bhd entered into a Subscription
(EA Tech) as there was no
generation. Kulim’s approach to optimise and Shareholders Agreement (SHA) for
revenue from Engineering, There was a slight decrease in the The Group recorded losses before tax
its portfolio takes into account factors the formation of Kulim Green Energy
Procurement, Contract, production of PK to 77,256 tonnes in of RM127.85 million in 2019, compared
such as the market condition, disposal Ventures Sdn Bhd (KGEV) as a joint
Installation and Construction 2019 compared to 79,286 tonnes in 2018. to a profit before tax of RM57.81 million
of non-profitable assets or businesses venture company for biomethane
projects throughout 2019. In addition, the price of PK dropped the year before. The loss before tax
that are no longer aligned with the commercialisation. MTC Orec was
In addition, the lower revenue was sharply in 2019 to an average price was primarily due to the recognition
Group’s strategic vision. In addition to established to capture the synergy
compounded by lower contribution of RM1,289 per tonne compared to of impairments due to changes to the
this, realising some of our investments is between O’REC Ind Sdn Bhd and MTC
from the Plantation Division, specifically RM1,792 per tonne in 2018. However, Malaysian Financial Reporting Standards
also an option if an appropriate offer is Engineering Sdn Bhd.
revenue from PK amounting to RM43 the Plantations segment remains the (MFRS). The Group also recorded joint-
received.
million. main contributor to the Group, delivering venture losses in the oil and gas segment
RM834.61 million or 69.04% of revenue.You can also read
