2020 started with an unprecedented outbreak of COVID-19 (Coronavirus Disease 2019) which has badly affected the economy of Singapore and the world. We have experienced series of events including Circuit Breaker imposed in 2nd quarter of 2020 and gradually move on to phase one and phase two in 3rd quarter and 4th quarter of 2020 respectively, to battle for the virus spread in Singapore. The recent open up for phase three in conjunction with low community spread and the availability of vaccine will help our economy to recover and improve business activities in 2021. As a result, the Ministry of Trade and Industry (“MTI”) is maintaining Singapore’s Gross Domestic Product (“GDP”) growth forecast at 4 to 6 per cent for 2021.
Our management is committed to play our part as a socially responsible enterprise to prevent the spread of COVID-19 by adhering with the local guidelines. We are prepared for a new operating approach under the new operating environment in 2021.
Delivering Performance in a Unprecedented Year
Despite business disruption during Circuit Breaker in Singapore, Movement Control Order in Malaysia and tightening control in People’s Republic of China (“PRC”) where our main businesses are, AnnAik was able to continually build on our transformation strategy and achieve S$0.18 million profit attributable to owners of the Company for the financial year ended 31 December 2020. In 2020, we are extremely cautious in navigating our businesses through the storm with two key strategies, i.e. capturing of mid to long term business opportunities by capitalizing on our core strengths, and effective cost and cash management.
The management believes that such prudent expansionary strategies in our core businesses during this downturn will bring value to our stakeholders in the long run. A few notable developments in the year had contributed to the improvement in the Group’s operating results. Amongst which, the successful completion of a strategic step-up acquisition of 6% shareholding in a few wastewater treatment plants, the stable commercial operations in two newly completed wastewater treatment plants, improved operating results of existing wastewater treatment plants, all under environmental business and the adoption of asset-light strategy with improvement in the utilisation of plants following the disposal of property and plant in its manufacturing business.
The recent upgrading projects secured in Changxing Linsheng Wastewater Treatment Co., Ltd and Changxing Wusheng Wastewater Treatment Co., Ltd together with subsequent two more upgrading projects are expected to roll out in 2021 and 2022. Those upgrading projects will continually enhance our assets value and able to generate a long term healthy recurring income and cash flows in our environmental business to the Group. The fulfilment of environmental projects secured earlier under the EPC model for hazardous wastewater division in Singapore and PRC also contributed positively to the results of the Group in 2020. It is heartening to note that the environmental division has proven to be growing even in current tough market condition and is expected to maintain its momentum.
Realising Growth Opportunities
Given the uncertain operating environment especially during the lock down in 2nd quarter of 2020 in Singapore and Malaysia, our distribution and manufacturing businesses registered weaker growth. Nevertheless, we have diversified our focus in distribution business beyond traditional oil and gas and shipbuilding industries to healthcare and high technology infrastructural projects in Singapore and surrounding countries. In addition, we also widen our trading products range from steel related products to chemical related products such as phenol or acetone through our extensive network in China and the regions. We believe such diversification will provide us a new growth engine in 2021 and beyond for our distribution business.
The Board of Directors is pleased to propose a first and final one-tier tax-exempt dividend of 0.1 Singapore cent per share for the year ended 31 December 2020. The dividend will be paid out to shareholders upon approval at the annual general meeting.
AnnAik, similar to other companies had an unprecedented year in 2020. We managed to deliver a positive results despite the challenging operating environment. This is an achievement belonging to not only AnnAik, but also to our shareholders, customers, vendors and business partners. Their continued support, trust and confidence in us have strengthened our resolve to work harder and to do better. Of course, we also recognise that these results would have been impossible without the invaluable contributions from our Board, management and staff. We remain committed to realising our strategic objectives and achieving our profitability goals.Download Annual report file