27 Performance Revi ew Sect ion 02 Annual Report 2022 MESSAGE FROM CHA I RMAN AND CHI EF EXECUT I VE its role as a provider of sustainable water, energy and infrastructure solutions while rewarding shareholders with value. FINANCIAL PERFORMANCE Group revenue grewby 12.8% to reach RM1,726.3 million (FY2021:RM1,530.9 million) while pre-tax earnings stood at RM203.4million, 118.0% higher year-on-year. (FY2021:RM93.3 million). FY2022 saw a 6.29% increase in non-domestic water consumption in Johor on the back of a recovery in commercial and industrial activities. This contributed positively to Group revenues, given that close to 60% of Ranhill SAJ's water sales is driven by non-domestic consumers. Revenue was also higher on the back of increased contributions from Ranhill Worley Sdn Bhd (“RW”) for the financial year. Earnings had improved on the back of recognition of non-revenue water reduction incentives received by Ranhill SAJ amounting to RM142.3 million. This was for the successful achievement of a NRW level of 25.1% for Johor in FY2021, well below the target of 26.1%. Ranhill SAJ was eligible for 75% of the costs incurred for undertaking related works and the grant is expected to be disbursed by the first half of FY2023. Group financial performance, specifically the Environment sector, which accounts for 68.0% of Group revenues, were impacted by the deferment in the implementation of new water tariffs. The increased tariffs coupled with the continued upward trend in consumption, will support revenues and earnings going forward into FY2023. We estimate that the 9% increase in nondomestic tariffs will bring in additional revenues for Ranhill SAJ for FY2023. The tariff increase was long overdue, given that the last revision was in year 2015. Against rising operating costs and inflationary pressures, it is timely that new rates which will underpin better financial sustainability for water operations are implemented. The full details of the Group’s financial, business and operational performance as well as sectoral breakdowns are provided in the Management Discussion and Analysis (“MD & A”) section of this report. DIVIDENDS On 16 December 2022, Ranhill declared its first interim dividend of 0.5 sen per share on 1,288,638,058 ordinary shares amounting to a total dividend payout of RM6.44 million, which was duly paid out to shareholders on 18 January 2023. On 6 April 2023, Ranhill declared a second interim dividend of 2.0 sen per share on 1,288,638,058 ordinary shares amounting to a payout of RM25.77 million per share. The said dividend allotment shall be paid to shareholders on 15 May 2023. Total dividend declared in respect of FY2022 amounts to 2.5 sen per share on 1,288,638,058 ordinary shares with a total dividend payout of RM32.21 million, equivalent to 33.8% of the Group’s FY2022 profit after tax and minority interests. A NOTE OF THANKS On behalf of the Board of Directors and Executive, I wish to firstly thank all Ranhill employees for their professional contributions and work ethic during the year under review. Thank you for your performance, and we look forward to your continued leadership, dedication, and innovative spirit as we progress towards greater heights. In a similar vein, I also wish to express our gratitude to all government agencies and industry regulators, shareholders, bankers, clients, investors, financiers and other stakeholders who have journeyed together with Ranhill in FY2022. We look forward to your continued support as we embark on a new chapter of continued value creation and the realisation of a better, more sustainable future together. Tan Sri Hamdan Mohamad Chairman and Chief Executive Highlight Targets: > 3,000 MLD Water, Wastewater and Reclaimed Water Treatment Capacity by 2024 > 1,000 MW Continue to Pursue Energy Target Capacity > 10% NRW Reduction by 2028 Revenue (RM’000): > Environment Sector RM1,173.7 > Energy Sector RM263.9 > Engineering Services Sector RM288.7
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