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ARB IOT (ARBB) - 2022 Q4 - Annual Report
ARBBARB IOT (ARBB)2023-06-15 16:00

Financial Performance - Total revenue for the period ended December 31, 2022, was 27,990,381,adecreaseof3227,990,381, a decrease of 32% compared to 41,123,984 in the same period of 2021[7]. - Gross profit for the period was 3,361,506,down603,361,506, down 60% from 8,527,708 in the previous year[7]. - Profit for the financial period attributable to owners of the Company was 831,684,asignificantdeclinefrom831,684, a significant decline from 7,458,840 in 2021[7]. - Basic earnings per share decreased to 0.05from0.05 from 0.75, a decline of 93%[7]. - Profit before tax for the period ended 31 December 2022 was 549,922,asignificantdeclinefrom549,922, a significant decline from 7,615,578 in 2021[119]. - The Group's revenue from project management fees was 566,508fortheperiodended31December2022,downfrom566,508 for the period ended 31 December 2022, down from 1,640,326 in 2021[114]. - The Group's revenue from the sale of goods was 27,423,873fortheperiodended31December2022,adecreaseof3027,423,873 for the period ended 31 December 2022, a decrease of 30% from 39,307,886 in 2021[114]. - The Group's tax expense for the period ended 31 December 2022 was 567,855,comparedtoataxbenefitof567,855, compared to a tax benefit of 180,639 in 2021[121]. Assets and Liabilities - Total assets increased to 94,642,040asofDecember31,2022,comparedto94,642,040 as of December 31, 2022, compared to 69,150,613 in 2021, reflecting a growth of 37%[6]. - Total liabilities rose to 28,287,299,upfrom28,287,299, up from 20,506,099 in the previous year, marking an increase of 38%[6]. - Net assets increased to 66,354,741,comparedto66,354,741, compared to 48,644,514 in 2021, representing a growth of 36%[6]. - Cash and bank balances improved to 7,702,481from7,702,481 from 5,348,748, an increase of 44%[5]. - Trade receivables decreased to 22,129,196asof31December2022,downfrom22,129,196 as of 31 December 2022, down from 26,273,468 in 2021, reflecting a decline of approximately 15.8%[62]. - Other receivables increased to 2,719,121asof31December2022,comparedto2,719,121 as of 31 December 2022, compared to 0 in 2021[68]. - Total deposits decreased slightly to 1,138,865in2022from1,138,865 in 2022 from 1,202,586 in 2021[68]. - The net carrying amount of property, plant, and equipment as of 31 December 2022 was 27,233,640,upfrom27,233,640, up from 741 in 2021[75]. - Accumulated amortization for intangible assets increased to 9,595,922asof31December2022,comparedto9,595,922 as of 31 December 2022, compared to 4,613,744 in 2021[84]. - The total cost of intangible assets remained at 38,507,266asof31December2022,unchangedfromthepreviousyear[83].−Theleaseliabilitydecreasedto38,507,266 as of 31 December 2022, unchanged from the previous year[83]. - The lease liability decreased to 9,891 as of 31 December 2022 from 41,010in2021[79].−TheGroup′stotalamountduefromrelatedcompanieswas41,010 in 2021[79]. - The Group's total amount due from related companies was 203,544 as of 31 December 2022, compared to 4,794,858in2021[72].−TheGroup′stotalamountduetorelatedcompaniesdecreasedto4,794,858 in 2021[72]. - The Group's total amount due to related companies decreased to 448,304 in 2022 from 8,559,572in2021[72].Expenses−Thecompanyreportedasignificantincreaseinadministrativeexpenses,whichroseto8,559,572 in 2021[72]. Expenses - The company reported a significant increase in administrative expenses, which rose to 2,861,420 from 935,532,reflectingariseof206935,532, reflecting a rise of 206%[7]. - The Group's employee benefits expenses increased to 372,317 in 2022 from 217,143in2021[127].−Otherpayablesandaccrualsincreasedsignificantlyfrom217,143 in 2021[127]. - Other payables and accruals increased significantly from 200,309 in December 2021 to 4,597,526inDecember2022,indicatingariseofapproximately22004,597,526 in December 2022, indicating a rise of approximately 2200%[100]. Business Operations - The company is engaged in four business lines: IoT Smart Home and Buildings, IoT Smart Agriculture, IoT System Development, and IoT Gadget Distribution[12]. - The company was incorporated on 1 March 2022 and is primarily involved in investment holding activities[12]. - The Group operates in two segments: provision of hardware and software for Internet of Things solutions, and investment holding and others[35]. - The Group's revenue recognition policy involves recognizing revenue upon the transfer of control of products or services to customers[38]. Acquisitions and Investments - ARB Techsymbol Sdn. Bhd. acquired 49% equity interest in ARB Logistic Technologies Sdn. Bhd. for RM49,000, making it a wholly-owned subsidiary[34]. - ARB Techsymbol Sdn. Bhd. acquired 51% equity interest in ARB WMS Technologies Sdn. Bhd. for RM51,000[34]. - ARB R&D Sdn. Bhd. acquired 100% equity interest in ARB Innovation Sdn. Bhd. for RM8,000,001[34]. - ARB AI Sdn. Bhd. acquired 1% equity interest in ARBIOT Sdn. Bhd. for RM1, making it a wholly-owned subsidiary[34]. - The Group acquired an additional 1% equity interest in ARBIOT for RM1,000,000, increasing its controlling interest from 99% to 100%[113]. - The Group acquired 100% of ARB WMS Technologies Sdn. Bhd. and ARB Innovation Sdn. Bhd., with a total fair value consideration of 1,927,923, which is expected to enhance its position in the Malaysian data networking market[155]. - ARB Innovation generated revenue of 37,595,785sincetheacquisition,whilebothsubsidiariesreportedacombinedlossbeforetaxof37,595,785 since the acquisition, while both subsidiaries reported a combined loss before tax of 92,837[157]. Cash Flow and Financing - The company generated net cash from operating activities of 10,898,525,comparedto10,898,525, compared to 3,455,755 in the previous year, indicating a substantial increase[10]. - For the period ended 31 December 2022, net cash from financing activities was USD 6,736,356, a decrease of 65.0% compared to USD 19,253,323 in the same period of 2021[11]. - Cash and cash equivalents at the end of the period increased to USD 7,613,664, up 42.3% from USD 5,348,748 at the end of 2021[11]. - The company had a repayment to the holding company amounting to USD 8,325,104, a significant increase from USD 3,984 in the prior year[11]. - The Group's liquidity management strategy includes maintaining adequate cash and cash equivalents to meet operational needs, with a focus on managing debt maturity profiles and cash flow forecasts[151]. - The proposed IPO aims to issue at least 1,200,000 new shares at a minimum price of USD 4 per share, potentially raising a minimum gross proceed of USD 4.80 million[160][161]. Risk Management - The Group's exposure to credit risk is primarily from sales made on credit terms, with measures in place to ensure customers have sound financial positions[147]. - The Group's financial risk management focuses on optimizing shareholder value while avoiding speculative transactions, with key risks identified as market, credit, and liquidity risks[145]. Corporate Governance - The company’s financial statements comply with International Financial Reporting Standards (IFRS) applicable to companies reporting under IFRS[23]. - The listing of ARB IOT Group Limited on NASDAQ was completed on 5 April 2023, following the submission of the registration statement to the SEC[162].