Chairman’s Statement

The board is pleased to propose a final dividend of 121 sen per ordinary share, representing a 14 sen increase compared to the final dividend of 107 sen paid in the preceding financial year.

While the global landscape for the year under review continues to be characterized by geopolitical and economic uncertainties, there have been positive signs of recovery and a return to normalcy in Malaysia. The home appliances market showed resilience and adaptation, shaped by technological advances and evolving consumer preferences.

In the face of these challenges, PMMA has mirrored this resilience and adaptability. Rather than dwelling on the various challenges the company faced, I would like to draw your attention instead to how PMMA dealt with these challenges in this FYE 2024 Annual Report. We navigated these headwinds with agility, flexibility, and disciplined execution in implementing our business strategies.

Financial Review And Strategic Response

Resilient financial Performance

PMMA demonstrated its tenacity and resourcefulness in capitalising on market opportunities and achieved a commendable higher combined profit before tax of RM106.7 million for the year under review. This was an increase of RM15.4 million or 16.9% compared to the preceding financial year. This improvement in profitability stemmed from lower material costs and a higher interest income of RM7.3 million following interest rate hikes.

This achievement is especially noteworthy considering the revenue for the year under review was lower by 8.7% to RM905.7 million, compared to the previous year. This was mainly due to the discontinuance of the Kitchen Appliances business and lower export sales for Fan products, especially in the Vietnam market. However, these losses were partially offset by increased Vacuum Cleaner exports in the Middle East and higher domestic Fan sales due to intensified promotions and the prolonged warmer weather conditions.

It is worth highlighting that the previous financial year’s profit before tax included a one-time insurance claim of RM22.3 million related to the 2021 flood incident, which was recognized as other operating income. On a normalized basis, if excluding this non-recurring gain, the profit before tax for FYE 2024 demonstrates a commendable improvement of approximately 55% compared to the preceding fiscal year, and provides a more accurate representation of our underlying financial performance and the sustained strength of our core business activities.

Prudent Capital Management

As of 31 March 2024, PMMA’s cash and cash equivalents stood at RM530.2 million, up from RM482.9 million at the close of the previous financial year. This increase is a reflection of the company’s prudent financial management. PMMA is committed to maintaining a robust capital structure that provides the flexibility and resilience necessary to fund capital investments from internally generated funds, sustain stable dividend payouts to shareholders, and pursue new investments.

Stable Dividends

Given PMMA’s notable performance for the FYE 2024, the Board is pleased to propose a final dividend of 121 sen per ordinary share, representing a 14 sen increase compared to the final dividend of 107 sen paid in the preceding financial year. Coupled with the interim single-tier dividend of 15 sen per ordinary share, the total gross dividend for FYE 2024 will be 136 sen per ordinary share, compared to 122 sen in FYE 2023.

Business Strategy And Development

Realignment of Portfolio for Growth

PMMA’s strategic focus on realigning its portfolio for sustainable growth has led to the streamlining of certain business lines and the expansion of our core products range to better cater to local market needs and preferences. This realignment for growth also optimizes the Group’s overall operational efficiency.

Building on this realignment, we have strategically broadened our product development focus in response to the discontinuation of the Rice Cooker business in FYE 2022 and the subsequent termination of the Small Kitchen Appliances products in FYE 2023. This focus includes exploring innovative solutions to cater to evolving consumer needs within our core products, and also expanding into the promising water solutions market in recognition of the increasing demand for advanced water-related products.

This strategic approach has yielded positive results, with the successful launch of several innovative products in FYE 2024. These include our first cordless stick Vacuum Cleaner in targeted markets in Asia, a brand new 3-blade remote control Ceiling Fan in Malaysia, the first Reverse Osmosis Water Purifier (“ROWP”) in Vietnam, Water Purification System (“WPS”) in Indonesia, a new manual Water Bidet in Malaysia, and a new series of Instant Home Showers across Asia.

PMMA recently renovated its showroom, which showcases the company’s commitment to innovation and customer- centricity and features an array of its bestselling products, as well as the latest advancements in our water solutions business with the WPS and the ROWP system.

In line with PMMA’s diversification into the water solutions business, PMMA has strengthened its partnership with Capital Distributors (S) Pte. Ltd. to launch the first KDK-branded Home Shower in the Singapore market. At the opening of our revamped showroom, senior executives from Capital Distributer (S) Pte. Ltd., which distributes KDK products in the Singapore market, signed a manufacturing agreement between the two companies.

Business Strategy And Development

PMMA prioritizes ethical and transparent governance practices. We are committed to maintaining robust risk management frameworks and upholding the highest standards of integrity across our operations.

We believe that a diverse workforce, including representation at the Board level, fosters innovation and drives sustainable growth. While we have not set a formal target for female representation, we are proud that women currently hold 44% of our board seats, exceeding the 30% recommendation outlined in the revised Malaysian Code of Corporate Governance (MCCG) 2021.

Advancing Sustainability

Sustainability has always been an integral part of Panasonic Group’s ethos. The Board of Directors (“Board”) is committed to responsible manufacturing practices, emphasising sustainability and good corporate governance.

In response to the dynamic business environment, the Board prioritizes and drives the sustainability agenda across the company. Our firm commitment to sustainability not only supports business growth but also fosters long-term value creation for our stakeholders.

Sustainability through green impact

We recognize the escalating impact of extreme climate events and are committed to playing our part in addressing this global challenge. In alignment with the Panasonic Group’s long-term environmental vision, “Panasonic GREEN IMPACT”, we have been implementing initiatives to reduce carbon emissions since 2019. Notably, we have completed the installation of solar panels at both our manufacturing plants in Shah Alam, and are continuing to explore and implement energy-saving measures. To further our efforts, we have recently initiated a visual energy system to monitor consumption patterns and identify areas for improvement.

Our efforts towards sustainability also include developing innovative products that promote energy efficiency and resource conservation, while minimizing environmental impact across product lifecycle. We continue to collaborate with Panasonic Appliances R & D Centre Asia Pacific Sdn. Bhd. to develop new technology and expertise in sustainable engineering. Through this partnership, innovative solutions are being developed, which will not only meet the needs of today’s discerning customers but also further strengthen their trust and confidence in PMMA’s approach to sustainability.

We are committed to accelerating our efforts towards achieving Net Zero CO2 emissions and are working on our framework and plans.

Sustainability with digital transformation

Digital transformation efforts are key to our sustainability aspirations. By optimizing production processes, we are enhancing both efficiency and environmental responsibility. We continue to integrate Industrial Internet of Things (“IIoT”), Robotics Process Automation and Smart Robotics into our operations, which will significantly strengthen our business efficiency and competitiveness.

As of FYE 2024, we expanded IIoT technology across 94% of the assembly lines, following on from a successful Phase 1 implementation in FYE 2023. Our Production Engineering Department has digitalized 40% of essential tasks for machinery preventive maintenance and is targeting 70% by the next fiscal year. PMMA plans to continue to further invest into Industry 4.0 technologies to drive its digital transformation efforts.

I am proud of the progress we have made in integrating innovation and digitalisation into our sustainability strategy, and I extend my gratitude to our stakeholders for their continued support on this vital sustainability journey. For a more comprehensive overview of our many sustainability initiatives, please refer to the “Sustainability Report” section on pages 20 to 42.

Note of Appreciation

PMMA’s positive growth trajectory and sound fundamentals are a testament to the collective and untiring efforts, support, commitment and contribution of our key stakeholders. I am deeply grateful to the Board for their support and counsel. The Board joins me in extending our sincere appreciation to our employees, shareholders, business partners, suppliers, financiers and, of course, the communities in which we operate. Thank you for continuing to be an essential part of our success.

Dato’ Azman bin Mahmud
Chairman