ARB IOT (ARBB) - 2024 Q4 - Annual Report

Financial Performance - Revenue decreased from approximately $94.9 million for the fiscal year ended June 30, 2022, to approximately$51.9 million for the fiscal year ended June 30, 2023, a decrease of $43.0 million or 45.3$15.7 million for the fiscal year ended June 30, 2022, to approximately $5.9 million for the fiscal year ended June 30, 2023, a decrease of$9.8 million or 62.4%[238]. - For the year ended June 30, 2024, revenue decreased by RM183.9 million ($39.5 million) or 76.0$12.3 million) compared to RM242.1 million ($51.9 million) for the year ended June 30, 2023[360]. - Revenue from IoT Smart Agriculture and System Development recorded RM52.0 million ($11.0 million) for the year ended June 30, 2024, a decrease of RM167.5 million ($36.0 million) or 76.3$47.0 million) for the year ended June 30, 2023[365]. - Profit for the year ended June 30, 2024, decreased by RM82.2 million ($17.5 million) or 298.6$11.6 million) compared to a profit of RM27.5 million (5.9 million) for the year ended June 30, 2023[372]. Business Operations - The company reorganized its operations into three business lines for the fiscal year ended June 30, 2024, merging IoT Smart Agriculture and IoT System Development due to significant declines in activity[232]. - The IoT Gadget Distribution business line was disposed of in October 2023 due to its insignificant profit generation, following the sale of ARB Midware Sdn. Bhd. and ARB Distribution Sdn. Bhd.[235]. - The company aims to enhance its financial flexibility and corporate reputation through its listing on the Nasdaq, promoting clearer segregation of business responsibilities[236]. - The company has entered new sectors such as digital warehouse management systems and point-of-sale systems since 2021, aiming to create a versatile IoT ecosystem[253]. - The company intends to further develop and optimize its IBS systems with additional IoT applications to improve construction productivity and efficiency[252]. Market Position and Strategy - The company aims to be a top IoT player in the ASEAN region, particularly in agriculture, property development, and logistics, driven by rapid urbanization and technology proliferation[239]. - The company plans to establish a regional center in Singapore and sales offices in major ASEAN cities such as Jakarta, Manila, and Bangkok to support its IoT business[241]. - The company believes its strong in-house R&D capabilities and extensive distribution network will enable it to capture significant market shares despite competition[281]. - The company emphasizes the importance of strong project management to ensure a high level of completion rate for its IoT projects[347]. - The company anticipates significant untapped opportunities to win new large enterprises across different industries in Malaysia and the ASEAN region[345]. Research and Development - The company’s subsidiaries are involved in research and development of IT and IoT solutions, contributing to the company's innovation and market expansion[211][212][213]. - The R&D team is focused on enhancing existing IT solutions and developing new platforms, with significant investment expected in future research and development efforts[275]. - The company emphasizes the importance of continued investment in technology and new product development to achieve strategic objectives[277]. Financial Management - The company provides a long credit period of 180 to 210 days to some large customers, which may affect its financial condition if customers experience difficulties[346]. - The company operates primarily through subsidiaries, and its ability to pay dividends depends on the dividends received from these subsidiaries[402]. - Cash provided by operating activities for the year ended June 30, 2024, was RM56.7 million (12.0 million), an increase from RM54.4 million ($11.7 million) in 2023, attributed to improved collection of receivables[394]. - Cash flows used in financing activities for the year ended June 30, 2024, were RM49.5 million ($10.5 million), a shift from cash generated of RM44.9 million ($9.6 million) in 2023, primarily due to repayments to a former controlling shareholder[398]. - Future cash resource requirements may arise due to changing business conditions or strategic expansions, potentially necessitating additional equity or debt financing[401]. Regulatory Compliance - The company is subject to various regulations, including the Personal Data Protection Act 2010, which mandates consent for processing personal data[299][300]. - The company must comply with the Companies Act 2016, which restricts dividend distributions to profits available only if the company is solvent[302]. - The company is required to adhere to the Civil Aviation Regulation 2016 for drone flight activities, necessitating authorization for specified circumstances[304]. - The company must maintain compliance with the Communications and Multimedia Act 1998, which regulates the use of network facilities and services[306][307]. - The company has a minimum capital investment requirement of RM1 million for foreign participation in distribution trade services in Malaysia[305].