DEAR SHAREHOLDERS
I am pleased to present you with the third consecutive year of top-line growth for Union Gas since the listing of our Group on the Catalist Board of the Singapore Exchange Securities Trading Limited in July 2017.
The financial year ended 31 December 2019 (“FY2019”) saw Union Gas generating strong double-digit expansion in both revenue and net profit. The sterling performance continued to reflect the success of our two strategic acquisitions in 2018, that was the purchase of non-contractual domestic customer relationships from Semgas Supply Pte. Ltd. (“Semgas”) and other dealers, which resulted in a 6.8% year-on-year (“YOY”) improvement in our Retail LPG – Domestic sales during the year, while the acquisition of U-Gas Pte. Ltd. (“U-Gas”) paved the way for our Group to sell LPG to hawker centres. In addition, the incorporation of a new subsidiary expanded the LPG supply to eating houses, coffee shops and commercial central kitchens in Singapore, resulting in a three-fold increase in revenue from our Retail LPG – Commercial business. At the same time, our revenue from diesel sales continued to rise steadily, registering a 19.1% uptick in sales with higher volumes being sold at our “Cnergy” brand fuel station at 50 Old Toh Tuck Road
Through our strategic investments, the improvement in both our Retail LPG and Diesel Businesses had more than mitigated the 9.3% YOY decline in sales from our CNG Business, which we had expected to fall in tandem with the shrinking number of natural gas vehicles and vehicles that operate on CNG in Singapore.
Overall, net profit came in 31.0% higher YOY at S$8.4 million in FY2019 on the back of revenue that grew 39.8% during the year to S$78.8 million. Our Group also maintained a healthy financial standing with cash and cash equivalents at S$21.0
Strengthening our team
Given the national past time of eating out at all hours of the day and the Asian culture of bonding over a meal, the Group strongly believes that our Retail LPG – Commercial segment has a lot more room to grow.
To capitalise on this and to take the Group to the next level of growth, we made several key appointments to boost the experience within the management team.
Following the last AGM in April 2019, Mr Teo Hark Piang (“Mr Teo”) was appointed Executive Director and CEO. Before taking over the helm, Mr Teo was our Group’s Director of Sales (Commercial and Industrial) responsible for overseeing the marketing strategies of our commercial and industrial segments. In addition to having more than 16 years of industry experience, he was an executive director of Union Energy Corporation Pte. Ltd. (“UEC”) before joining our Group and was credited for it becoming the first LPG company to supply LPG to hawker centres. His experience will be invaluable as we seek to grow our commercial segment.
In June 2019, we appointed Mr Ng Yong Hwee as Deputy CEO. With over 25 years of work experience including more than 10 years in C-suite positions in infrastructure and energy companies leading mergers and acquisitions, business integration, strategy and corporate planning, he will be instrumental in helping the Group develop and implement its strategic plans.
To strengthen the Retail LPG – Commercial business further, we appointed Mr Sim Lai Kitt as Head of Commercial in 2019. He has been in the industry since 1999 and in 2004, he assisted Mr Teo in UEC’s penetration of the hawker centre segment and he will continue to provide support in this area. Most recently in January 2020, we appointed Ms Hong Pay Leng, a 20-year veteran in finance and accounting, as Chief Financial Officer to replace Ms Chng Geok, who had resigned as Finance Director to pursue other interests.
We are confident the Group will benefit from their collective experience as well as the drive and dedication of our existing staff, some of whom have been with us for decades.