Pansar expects upswing in sales across five divisions

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Pansar attributed the sharp contrast between the spike in sales recorded in 4QFY16 to the pre and post reaction to the implementation of the GST.

Pansar attributed the sharp contrast between the spike in sales recorded in 4QFY16 to the pre and post reaction to the implementation of the GST.

KUCHING: Sarawakian-based Pansar Bhd (Pansar) is proactively searching for contracts as it expects an upswing in sales in all its business divisions in the coming year.

To override the rub-off from the downturn in the oil and gas sector, Pansar’s marine and industrial business division is aggressively scouting for and venturing into bids for harbour tugboats and surveillance patrol vessels.

“Talent is key to delivering on our commitment, and Pansar continues to draw and invest in salf of the earth talent, in particular those from the technical field with strong credentials, character and promise,” detailled chairman Dato James Tai Cheong in its Annual Report 2015 released last week.

“The undercurrents pinning the Malaysian business environment in the last fiscal year has simmered down. Expectations are now more realistic and firm among our principals, vendors and clients.

“Pansar is moving forward with a pragmatic approach and is geared to channel its resources, expertise and talent in nurturing the coming year for an upswing in sales in all our business divisions.”

From early 2015, signs hovered over the horizon on the impending depreciation of the ringgit against major global currencies.

This along with the reverberation in Malaysia from the removal of fuel subsidies and the commencement of the Goods and Services Tax had a cascading effect on the performance of Pansar’s five business divisions, Tai said.

“To address the outlook in the immediate future, the board developed a long-term strategy with a two-fold direction and embarked upon it during the last fiscal year.

“First is to continue to diversify and widen the revenue bases through new product sourcing and new busienss development. Second is to review all out fundamentals so as to continue seeking business efficienecies wherever possible,” he said, adding that there is a gestation period for the measures to come to fruition.

“Nonetheless, as a result of more prodent strategies adopted in view of current market conditions, the group’s gross profit in 44QFY16 increased by RM3 million although revenue came in higher by RM1.1 million.”

Meanwhile, Pansar attributed the sharp contrast between the spike in sales recorded in 4QFY16 to the pre and post reaction to the implementation of the GST.

“This flood of additional sales to the tune of approximately RM40 million was earlier anticipated to be registerest in 1QFY16.

“Across our five business divisions except for the wood engineering and supplies division, the other four divisions had a lacklustre fiscal year in revenue and profit.”

The four divisions are building products; marine and industrial; electrical and office automation; and mechanial and electrical.

In FY16, the group saw a drop of 19.9 per cent in revenue against FY15. However, its gross profit margin decreased by only 0.3 per cent and the group’s financial position remains on healthy ground.

“This is illustrated in Pansar’s net gearing which stood at negative 13 per cent compared to 9.5 per cent in the previous fiscal year, a rise of RM2.9 million in total equity to RM164.8 million, and net assets per share of 59 sen as compared to 58 sen in the previous fiscal year.

“Lessons learnt have led the board to put guardrails in place as a safeguard to uncertainties in the coming year.”