On behalf of the Board of Directors of WCT Berhad (“WCT”), I am pleased to present the Annual Report and Audited Financial Statements of the Group and the Company for the year ended 31 December 2010.

ECONOMIC OVERVIEW

The global economy recovered unevenly last year after the 2.2% contraction in 2009 and registered an estimated average growth of 3.9%. Nevertheless, the growth outlook for Asia remains strong, supported by domestic demand.

In 2010, the Malaysian economy emerged from a contraction of 1.7% in 2009 to record a 7.2% growth in her Gross Domestic Product (“GDP”), outperforming the initial forecast of 6%.  Inflation averaged at a manageable rate of about 1.7% last year.

FINANCIAL HIGHLIGHTS

For the year ended 31 December 2010, the Group achieved profit after tax of approximately RM210 million as compared to RM216 million recorded in the previous year. The Group’s revenue of RM1,708 million represented a decrease of 63% compared to the previous year’s revenue of RM4,667 million. Despite the sharp decline in revenue, the Group managed to achieve net profit of RM141 million compared to RM147 million in 2009.

The Civil Engineering and Construction Division contributed approximately RM1,443 million or 84% of the Group’s total revenue. As for profit after tax, the Division’s contribution to the Group is about RM142 million or 67% of the Group’s total profit after tax.

For the year under review, the Property Development and Investment Division recorded revenue of approximately RM266 million and profit after tax of approximately RM68 million.

OUTLOOK

Malaysia's economy is expected to be sufficiently resilient to withstand the recent events in the Middle East, North Africa and Japan which may continue to impact on the supply and prices of commodities and building materials. Bank Negara has recently reported that it expects Malaysia’s GDP to grow by 5% to 6% in 2011 driven by strong expansion in domestic demand. Inflation is expected to increase to about 2.5% to 3.5% this year.

Following Qatar’s successful bid to host the World Cup in 2022 and the launch of the Economic Transformation Program (“ETP”) by the Government of Malaysia, we are positive about the construction and property market conditions in the years ahead.  The ETP is aimed at propelling Malaysia towards high income status by the year 2020 and is expected to have a positive impact on the construction and property industries.

STRATEGIC PARTNERSHIP

In October 2010, the Group was awarded a Build-Operate-Transfer (“BOT”) concession by Malaysia Airports Holdings Berhad (“MAHB”). Pursuant to the award and subject to the execution of the Concession Agreement between WCT and MAHB (“the Parties”), the Parties will jointly undertake, via a special purpose vehicle (“SPV”), the privatisation of the development of an Integrated Complex at the new Low Cost Carrier Terminal (KLIA2) (“Integrated Complex”) at the Kuala Lumpur International Airport (KLIA) Sepang, Selangor, Malaysia.  The concession shall be for a period of up to 25 years which may be extended for a further period of 10 years. The equity interests of WCT and MAHB in the SPV will be in the proportion of 70% and 30% respectively.

CORPORATE EXERCISE

Last year, the Company undertook the following proposals which were approved by the shareholders at the Extraordinary General Meeting held on 13 December 2010:-

(I)      Issuance of RM600,000,000 nominal value of serial fixed rate bonds of up to 5 years (“Bonds”) with up to 193,736,279 detachable warrants (“WCT Warrants”) (“Bonds with Warrants Issuance”); and

(ii)      Offer for Sale of the provisional rights to allotment of up to 193,736,279 WCT Warrants by AmInvestment Bank Berhad and RHB Investment Bank Berhad on a renounceable basis of one (1) WCT Warrant for every five (5) existing ordinary shares of RM0.50 each held in the Company (“Offer for Sale”).

Subsequently, the Bonds were issued on 28 December 2010 and the Offer for Sale was completed with the listing of the WCT Warrants on the Main Market of Bursa Malaysia Securities Berhad on 18 March 2011.  The Offer for Sale was oversubscribed by 89.69%.

DIVIDEND

The Company paid an interim dividend of 5.0 sen per ordinary share of RM0.50 each less 25% tax on 23rd September 2010 in respect of the year ended 31 December 2010.  The Board of Directors is recommending a final dividend of 5.0 sen per ordinary share of RM0.50 each less 25% tax. If approved at the forthcoming Annual General Meeting, the total dividend payout for the financial year 2010 will be 10.0 sen per ordinary share of RM0.50 each, less tax (2009: 10.0 sen per ordinary share of RM0.50 each, less tax).

COMMITMENT TO THE ENVIRONMENT

In line with the Group’s commitment towards the environment as well as to align our environmental management practices to the international standards, WCT Berhad has successfully achieved the ISO 14001:2004 Environmental Management Systems certification on 9 April 2010.

30th ANNIVERSARY CELEBRATION

WCT Berhad is celebrating its 30th Anniversary in 2011. In conjunction with this significant milestone, the Group has lined up a series of competitions and various activities for its employees which culminated in the 30th Anniversary Dinner held on 7 January 2011 at the Group’s new hotel, Première Hotel, in Klang, Selangor. 

ACKNOWLEDGEMENT & APPRECIATION

On behalf of the Board of Directors, I would like to dedicate the achievement of this significant 30th Anniversary milestone to all our stakeholders for their continuous trust, support and confidence in the Group. I would like to express my sincere appreciation to our customers, shareholders, business associates as well as the various regulatory and government authorities. Last but not least, my heartfelt thanks to the dedicated management and employees for your commitment and contribution to the success of WCT Group.

Salam 30th Anniversary.

Dato’ Capt. Ahmad Sufian

Chairman

11 April 2011