Page 38 - HRC_AR2020

36 I 2020 ANNUAL REPORT I mANAgEmENT DISCUSSION & ANALYSIS

PERFORmANCE REvIEW

Income and Expenses • The valuation basis of these assets is as stated in our
accounting policies.
The Company recorded higher operating expenditure by • The Company’s current assets comprise of derivatives that
RM19.4 million from RM287.9 million in FY2019 to RM307.3 have maturity of less than 12 months, inventories, receivables
million in FY2020. This primarily resulted from the recognition and cash. Current assets have decreased from RM3.7 billion
of allowance for doubtful debts amounting to RM26.2 million to RM2.5 billion, a decrease of 33.0 per cent as compared
for Hin Leong Trading (Pte.) Ltd., which was partly offset by to FY2019. The decrease is mainly attributable to decrease in
the spend optimisation during the year. Other operating gains inventory and cash balances as at year end. Inventory balances
were higher due to positive fair values of RM300.4 million decreased by 29.5 per cent or RM439 million mainly due to
recognised from the commodity swaps, whereas the Company lower crude price resulted from the lockdowns implemented
recorded a negative fair value of RM48.6 million in FY2019. by most countries in response to COVID-19 pandemic which
The utilisation of reinvestment allowance and recognition of led to the sharp decline in the global fuel demand.
deferred tax assets on tax losses previously not recognised was
offset against the taxable profits as of 31 December 2020, Total liabilities have decreased by 36.0 per cent or RM1.3 billion
resulting in lower taxation. from RM3.6 billion to RM2.3 billion in FY2020. Further details
are set out below:
Lower depreciation and amortisation reflect the extended
useful life of refinery assets based on an assessment carried out • Current liabilities comprise mainly of payables, derivatives
in the previous financial year. There were lower finance costs with maturity less than 12 months, revolving credit and a
for the year due to capitalisation of borrowing costs for major portion of lease and term loan balances that are repayable
projects such as Euro 4M, Euro 5 Gasoil and H2GEN. within the next 12 months. Trade payables mainly relate to
payables for crude purchases and payables relating to capital
The overall impact resulted in profit after tax increasing by expenditure. Trade payables are lower in FY2020 due to the
617.4 per cent or RM216 million as compared to FY2019.
timing of crude payments and capital expenditure.
• Non-current liabilities comprise of leases, term loans, deferred
Total Assets and Liabilities tax liabilities and derivatives with maturity of more than
12 months. Term loans are repayable over a two (2)-year
Total assets decreased 20.4 per cent or RM1.2 billion from period, denominated in USD and are secured by way of
the previous financial year. Details of the total assets of charges on the Company’s assets.
RM4.5 billion in FY2020 is set out below:

• Carrying amount of fixed assets i.e. property, plant and Cashflow
equipment, intangible assets, right-of-use assets of RM2.0
billion comprises: Cash generated from operating activities was utilised mainly
for capital investment purposes for projects including Euro 4M,
Euro 5 Gasoil and H2GEN, partial repayment of term loans and
Carrying Amount of Fixed Assets borrowings, and servicing the interest charges. Hence, the cash
balance as at the end of the year was lower at RM683.8 million
n 4% Land and Buildings
compared to RM1.0 billion in FY2019.
n 8% CAR
n 11% Hijau
Dividends
n 8% LRCCU
n 4% MTA 2018 On 26 February 2021, the Directors declared a single-tier interim
n 52% Assets under dividend of RM0.04 per share, amounting to RM12,000,000
construction in respect of the financial year ended 31 December 2020.
The dividend is payable on 15 April 2021 to shareholders
n 1% Right-of-use-assets
registered on the Record of Depositors at the close of business
n 1% Intangible Assets on 23 March 2021. These financial statements do not reflect
n 12% Others the interim dividend which will be accounted for in the financial
year ending 31 December 2021.