Group Project

COURSE: FINANCIAL MANAGEMENT

COURSE CODE: PFN1263

GROUP: HIBISCUS PETROLEUM BERHAD

SECTION: AA6.14

LECTURER: MADAM NURAZLINA

ABDULLAH GROUP MEMBERS:

NAME ID NUMBER
MUHAMMAD ALIF AIMAN BIN MOHD
RITHAUDIN BGJ220110174

AHMAD UMAR BIN NORMAN AZRI BGJ220110587

MUHAMMAD MUSYRIF AMNI MIN MOHD BGJ220110700

NIZAM

AMIR HAKIM BIN MOHD ASMAWI BGJ220111006

SUBMISSION DATE: 23/05/2024

1
Table of Contents
Group Project................................................................................................................................1

SECTION: AA6.14..........................................................................................................................1

SUBMISSION DATE: 23/05/2024..................................................................................................1

Company background.........................................................................................................................5

Company History..................................................................................................................................4

Mission and Vision of the company...................................................................................................5

COMPANY’S PRODUCT.......................................................................................................................6

2.0 FINANCIAL PERFORMANCE EVALUATION................................................................................7

LIQUIDITY RATIOS...........................................................................................................................7

CURRENT RATIO ( CR )................................................................................................................7

GRAPH...........................................................................................................................................8

POSSIBLE CAUSES......................................................................................................................8

QUICK RATIO ( QR )...................................................................................................................10

GRAPH.........................................................................................................................................11

EFFICIENCY RATIOS......................................................................................................................13

INVENTORY TURNOVER ( ITO ).................................................................................................13

GRAPH.........................................................................................................................................14

RECOMMENDATIONS....................................................................................................................15

TOTAL ASSET TURNOVER ( TATO ).........................................................................................16

GRAPH.........................................................................................................................................17

RECOMMENDATION.......................................................................................................................18

FIXED ASSET TURNOVER ( FATO )..........................................................................................19

GRAPH.........................................................................................................................................19

RECOMMENDATION.......................................................................................................................20

AVERAGE COLLECTION PERIOD ( ACP )................................................................................21

GRAPH.........................................................................................................................................21

POSSIBLE CAUSES....................................................................................................................22

RECOMMENDATION.......................................................................................................................23
 LEVERAGE RATIOS.......................................................................................................................24

DEBT RATIO ( DR).......................................................................................................................24

GRAPH.........................................................................................................................................24

POSSIBLE CAUSES....................................................................................................................25

RECOMMENDATION...................................................................................................................25

DEBT TO EQUITY RATIO ( DER )...............................................................................................26

GRA..............................................................................................................................................26

RECOMMENDATIONS....................................................................................................................27

C.TIMES INTEREST EARNED ( TIE )..........................................................................................29

GRAPH.........................................................................................................................................29

POSSIBLE CAUSES....................................................................................................................30

RECOMMENDATIONS.................................................................................................................30

PROFITIBILITY RATIOS..................................................................................................................31

A. OPERATING PROFIT MARGIN ( OPM)..................................................................................31

GRAPH.........................................................................................................................................31

POSSIBLE CAUSES....................................................................................................................32

RECOMMENDATION...................................................................................................................32

B .NET PROFIT MARGIN ( NPM )...............................................................................................33

GRAPH.........................................................................................................................................33

POSSIBLE CAUSES....................................................................................................................34

RECOMMENDATION...................................................................................................................34

C .RETURN ON EQUITY( ROE )..................................................................................................35

GRAPH.........................................................................................................................................35

POSSIBLE CAUSES....................................................................................................................36

RECOMMENDATION...................................................................................................................36

D .RETURN ON ASSET ( ROA )..................................................................................................37

GRAPH.........................................................................................................................................37

POSSIBLE CAUSES....................................................................................................................38

RECOMMENDATION...................................................................................................................38

5 ) MARKET RATIOS.......................................................................................................................39

1
 A. EARNING PER SHARE ( EPS)...............................................................................................39

GRAPH.........................................................................................................................................39

POSSIBLE CAUSES........................................................................................................................40

RECOMMENDATION...................................................................................................................41

B.DIVIDENS PER SHARE ( DPS)................................................................................................41

GRAPH.........................................................................................................................................41

POSSIBLE CAUSES....................................................................................................................42

DIVIDENS PAYOUT RATIO ( DPR).............................................................................................43

GRAPH.........................................................................................................................................44

POSSIBLE CAUSES....................................................................................................................44

RECOMMENDATION...................................................................................................................45

PRICE EARNINGS RATIOS ( PE)...............................................................................................45

GRAPH.........................................................................................................................................45

POSSIBLE CAUSES....................................................................................................................46

DIVIDEND YIELD ( DY )...............................................................................................................47

GRAPH.........................................................................................................................................48

POSSIBLE CAUSES....................................................................................................................48

RECOMMENDATION...................................................................................................................49

4.0 REFERENCES...............................................................................................................................50

APPENDIX 2021..................................................................................................................................51

2022.....................................................................................................................................................59
 Company background

An exploration and production firm for oil and gas based in Malaysia is called
Hibiscus Petroleum Berhad. Established in 2007, its principal objective is to acquire and
improve underutilized oil assets in order to boost their profitability and production. The
corporation conducts business both abroad and domestically in Malaysia.

Hibiscus Petroleum has formed strategic alliances and acquisitions to expand its
holdings. It is involved in a number of oil and gas assets, including developing and
producing fields. The business is renowned for its creative approach to reviving old oil
resources using cutting-edge machinery and effective management.

A noteworthy acquisition that considerably increased its production profile was a 50% stake
in the North Sabah Enhanced Oil Recovery Production Sharing Contract (PSC), which is
situated offshore Sabah, Malaysia.

Hibiscus Petroleum is dedicated to corporate responsibility and sustainable

practices in addition to its core business. It seeks to benefit the communities in which it
operates while conducting business in an environmentally conscious manner.

In general, Hibiscus Petroleum Berhad has established itself as a prominent participant in

the oil and gas sector, emphasizing the optimization of current assets and the pursuit of
expansion prospects in both the local and global markets

Hibiscus Petroleum Berhad, a prominent entity within Malaysia's energy landscape,

operates across various segments of the oil and gas industry, with a primary focus on
exploration and production (E&P). Leveraging its expertise and strategic partnerships,
Hibiscus Petroleum engages in the intricate process of identifying, assessing, and
exploiting oil and gas reserves both domestically and internationally. In the upstream
sector, the company invests substantially in exploration activities, employing cutting-edge
technologies and geological expertise to pinpoint promising hydrocarbon reservoirs. Upon
discovery, it undertakes the development of these resources through meticulous planning
and execution of drilling operations, aiming to maximize production efficiency and resource
recovery.

1
 Furthermore, Hibiscus Petroleum's involvement extends beyond mere extraction,
encompassing midstream operations that facilitate the transportation, storage, and
processing of crude oil and natural gas. With an eye towards optimizing the value chain, the
company may invest in infrastructure such as pipelines, terminals, and processing facilities
to ensure the smooth flow of hydrocarbons from the wellhead to end-users. While its
primary focus lies in upstream and midstream activities, Hibiscus Petroleum may also have
interests in downstream operations, albeit to a lesser extent. This could include refining
crude oil into various petroleum products or participating in the marketing and distribution of
refined products to consumers and industries.

Moreover, Hibiscus Petroleum may collaborate with or subcontract various oilfield

service providers to support its E&P endeavors. These services span a wide range, from
drilling and well completion to maintenance and enhanced oil recovery techniques, essential
for optimizing production output and prolonging the lifespan of existing assets. Additionally,
as the global energy landscape undergoes a transformative shift towards sustainability and
renewable sources, Hibiscus Petroleum might explore opportunities in the renewable
energy sector. This could involve investments in solar, wind, or other clean energy projects,
aligning with the company's commitment to environmental stewardship and long-term
viability.

In summary, Hibiscus Petroleum's multifaceted presence within the oil and gas
industry encompasses upstream exploration and production, midstream infrastructure
development, potential downstream activities, collaboration with oilfield service providers,
and a forward-looking approach towards renewable energy initiatives. Through its diversified
portfolio and strategic initiatives, the company remains well-positioned to navigate the
dynamic energy landscape while delivering value to its stakeholders and contributing to
Malaysia's energy security and economic growth.

3
Company History

Since its establishment in 2007, the Malaysian oil and gas exploration and production
business Hibiscus Petroleum Berhad has created a remarkable story of growth and
perseverance. The company was founded with the goal of taking advantage of opportunities
in the energy industry, specifically in the purchase and revitalization of underutilized oil fields.
Early on, Hibiscus concentrated on partnerships and smart acquisitions to expand its asset
portfolio both locally in Malaysia and abroad.

The purchase of a 50% stake in the North Sabah Enhanced Oil Recovery
Production Sharing Contract (PSC) offshore Sabah, Malaysia, was one of the turning points
in Hibiscus Petroleum's history. The company's production profile was greatly enhanced by
this acquisition, which also acted as a driver for its expansion plan. By introducing cutting-
edge technologies and effective procedures to rejuvenate old oil fields and increase their
production and profitability, Hibiscus showed its dedication to innovation and operational
excellence.

Hibiscus Petroleum was committed to corporate responsibility and environmental

practices even as company grew. The business functioned with a strong awareness of
environmental issues and made an effort to leave as little of an ecological impact as possible
while generating value for stakeholders and shareholders. Through its operations, Hibiscus
sought to benefit the communities in which it operated in addition to making a profit.

Hibiscus Petroleum has successfully negotiated the shifting terrain of the oil and gas
sector throughout the years, taking advantage of openings and conquering obstacles. Its
success has been largely attributed to its adaptability and tenacity, which have allowed the
business to weather changes in the market and come out stronger. Presently, Hibiscus
Petroleum is a prominent participant in the energy industry, possessing a varied assortment
of assets and a standing for superiority in exploration, production, and sustainable growth.

4
Mission and Vision of the company

Being a reputable, worthwhile, and accountable energy firm is our goal. We are still
dedicated to operating in an ethical, responsible, and efficient manner as we strive toward
our goal. Our goal at Hibiscus Petroleum Berhad is to maximize value for our stakeholders
while ethically exploring, producing, and delivering energy solutions that drive progress. Our
goal is to fully utilize oil and gas assets by means of innovative technology, sustainable
practices, and strategic acquisitions. This will enhance the energy security and prosperity of
the communities we serve. At Hibiscus Petroleum Berhad, our goal is to dominate the
worldwide oil and gas market and be known for our superiority in production, exploration,
and sustainable development. Our goals are to spur creativity, add value, and leave a
lasting impression on.

5
COMPANY’S PRODUCT

Hibiscus Petroleum Berhad primarily produces crude oil and natural gas as its
mainproducts. These hydrocarbons are extracted through the company's exploration and
production activities from its various oil and gas fields.

The crude oil produced by Hibiscus Petroleum undergoes refining processes to yield
various petroleum products such as gasoline, diesel, jet fuel, and various petrochemicals.
While Hibiscus Petroleum itself may not engage extensively in downstream activities like
refining, it may sell its crude oil to refineries or enter into agreements with refining companies
for further processing.

In addition to crude oil, Hibiscus Petroleum also produces natural gas, which can
beused for various purposes including electricity generation, industrial processes, and as a
cleaner alternative fuel for transportation.

These products are crucial not only for meeting energy demand but also for driving
economic growth and development, both domestically in Malaysia and potentially
ininternational markets where Hibiscus Petroleum operates.

6
2.0 FINANCIAL PERFORMANCE EVALUATION

LIQUIDITY RATIOS

CURRENT RATIO ( CR )

CR = Current Assets
Current Liabilities

CALCULATION (2021)
=659,575
473,331
=1.39 times
CALCULATION (2022)
=1,543,612
1,698,880
=0.91 times
CALCULATION (2023)
= 2,090,944
1,403,254
= 1.49 times

7
GRAPH

CURRENT RATIO
1.6 1.49
1.39
1.4

1.2

1 0.91

0.8

0.6

0.4

0.2

2021 2022 2023

ANALYSIS

Current ratio for Hibiscus Petroleum Berhad for the year 2021 is 1.39 times. For the year 2022, it is
0.91 times, and for the following year, 2023, the ratio is 1.49 times.

This indicates that the company is most able to pay their short term obligation when it's due in year
2023 compared to the year 2022 and 2021.

POSSIBLE CAUSES

 I nventory management: Since inventory is regarded as less liquid than cash or

accounts receivable, a company with high inventory levels may have a lower current ratio.
 Cash management: A business with minimal cash reserves might have a lower current ratio,
which would suggest possible problems with liquidity.
 Short term obligations:Excessive short-term debt might lower the current ratio and
strain liquidity.

8
RECOMMENDATION

 To save interest costs and increase liquidity, refinance or pay off short-term debt. Don't
rely too much on short-term loans to pay for operations.
 Put measures in place to increase sales and revenue, like reaching a wider audience,
introducing new goods or services, or improving marketing and sales initiatives.

 To support working capital needs and lessen dependency on short-term debt, assess
the likelihood of obtaining long-term financing solutions.

9
QUICK RATIO ( QR )

QR = Current Asset - Inventories-prepaid expenses

Current Liabilities

CALCULATION (2021)
=659,575 - 49,462
473,331
= 1.29 times
CALCULATION (2022)
=1,543,612 - 163,900
1,698,880
= 0.81 times
CALCULATION (2023)
= 2,090,944 - 198,628
1,403,254
= 1.35 times

10
GRAPH

QUICK RATIO
1.6

1.4 1.35
1.29
1.2

1
0.81
0.8

0.6

0.4

0.2

0
2021 1.29
2022 0.81
2023 1.35

ANALYSIS

Quick Ratio for Hibiscus Petroleum Berhad for the year 2021 is 1.29 times. For the year 2022, it is
0.81 times, and for the following year, 2023, the ratio is 1.35 times.

This indicates that the company is more able to pay their current liabilities when it's due in year 2023
compared to the year 2022 and 2021.

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POSIBBLE CAUSES

Short-term investments: Marketable securities and other investments with a rapid cash
conversion rate have a beneficial effect on the fast ratio. Investments with liquidity raise the
fast ratio's numerator.
Sales and revenue trends:A decline in sales or revenue can have an impact on liquidity
and lower the quick ratio, particularly if an increase in accounts receivable results from
delayed collections.

Economic conditions:A company's liquidity position and quick ratio can be impacted
by economic downturns, which can also have an effect on sales and cash flow.

RECOMMENDATIONS

 Simplify inventory procedures to cut down on extra or outdated stock. To reduce

holding costs, concentrate on items that move quickly and use just-in-time inventory
techniques.
 Establish stringent credit guidelines to guarantee prompt accounts receivable
collection. In order to encourage clients to make their payments on time and shorten
the average collection period, provide discounts for early payment.

12
EFFICIENCY RATIOS

INVENTORY TURNOVER ( ITO )

ITO = Cost Of Goods Sold

Inventories

CALCULATION (2021)
= 304,021
49,462
= 6.15 times
CALCULATION (2022)
= 479,630
163,900
= 2.93 times
CALCULATION (2023)
= 817,463
198,628
= 4.12 times

13
GRAPH

INVENTORY TURNOVER

4.12

2.93

6.15

0 1 2 3 4 5 6 7

2023 2022 2021

ANALYSIS

Inventory Turnover for Hibiscus Petroleum Berhad for the year 2021 is 6.15 times. For the year 2022,
it is 2.93 times, and for the following year, 2023, the ratio is 4.12 times.

This indicates that the company is more effectively managed its inventories when it's due in year
2021 compared to the year 2022 and 2023.

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POSSIBLE CAUSES

 Financial health: A company's capacity to maintain ideal inventory levels may be

hampered by cash flow problems or other financial limitations, which may have an
effect on turnover rates. Liquidity and sufficient financial resources are necessary for
effective inventory management.

 Obsolate inventory:Slow-moving or obsolete inventory has a detrimental effect on

turnover ratios. Review inventory frequently to find out which things are outdated,
and then use tactics like sales or discounts to get rid of excess inventory.
 Quality Control And Defective Products:Inventory can be held up and turnover rates
can be reduced by subpar quality control procedures that result in faulty or unsaleable
products. Strict quality control procedures can reduce the cost of keeping inventory on
hand and increase turnover.

RECOMMENDATIONS

 To ascertain the ideal inventory levels, carefully examine demand trends, sales
information, and previous trends. By matching inventory levels to real demand and
keeping enough product on hand to satisfy client demands, you can prevent
overstocking.

 Adopt JIT inventory management techniques to increase turnover and reduce the
expense of keeping inventory on hand. JIT guarantees that inventory is only refilled
when necessary, which lowers the cost of storing extra inventory.

15
 TOTAL ASSET TURNOVER ( TATO )

TATO = Sales
Total Assets

CALCULATION (2021)
= 804,781
2,788,043
0.29 times
CALCULATION (2022)
1,696,521
5,512,418
= 0.31 times
CALCULATION (2023)
2,344,830
6,198,528
0.38 times

16
GRAPH

TOTAL ASSET TURNOVER

0.4 0.38

0.35
0.31
0.29
0.3

0.25

0.2

0.15

0.1

0.05

2021 2022 2023

ANALYSIS

Total Asset Turnover for Hibiscus Petroleum Berhad for the year 2021 is 0.29 times. For the year
2022, it is 0.31 times, and for the following year, 2023, the ratio is 0.38 times.

This indicates that the company is more effectively managed their total assets in generating sales
when it's due In year 2023 compared to the year 2022 and 2021.

17
POSIBBLE CAUSES

 Asset Utilization Asset:Using assets effectively is essential to producing more sales

at the same level of investment. Asset turnover percentages are typically greater in
businesses that efficiently utilize their assets, including inventories, accounts
receivable, and property, plant, and equipment (PP&E).

 Product Efficientcy: Higher asset turnover ratios can be attributed to more efficient
production processes. Businesses that can efficiently and rapidly create items or provide
services are likely to have higher sales in relation to their assets.

RECOMMENDATION

 Make a detailed evaluation of all assets, including as inventories, property, plant, and
equipment. Determine idle or underutilized assets and devise plans to maximize their
use in order to increase income.
 To increase production efficiency, put lean manufacturing principles and continuous
improvement programs into practice. To optimize asset use, locate and remove
bottlenecks, shorten setup times, and enhance workflow.

18
 FIXED ASSET TURNOVER ( FATO )

FATO = Sales
Net Fixed Assets

CALCULATION (2021)
= 804,781
604,833
= 1.33 times
CALCULATION (2022)
= 1,696,521
1,838,981
= 0.92 times
CALCULATION (2023)
= 2,344,830
2,024,457
= 1.16 times

GRAPH

FIXED ASSET TURNOVER

1.16

0.92

1.33

0 0.2 0.4 0.6 0.8 1 1.2 1.4

2023 2022 2021

19
ANALYSIS

Fixed Asset Turnover for Hibiscus Petroleum Berhad for the year 2021 is 1.33 times. For the year
2022, it is 0.92 times, and for the following year, 2023, the ratio is 1.16 times.

This indicates that the company is more effectively managed their fixed asset in generating sales
when it's due in year 2021 compared to the year 2022 and 2023.

POSSIBLE CAUSES

 Competetive Landscape:Market conditions and rivals' tactics may have an impact on

fixed asset turnover. To maintain or lower turnover rates, businesses must separate
themselves from the competition and adjust to changing market conditions.
 Induatry And Business Model:The fixed asset turnover ratio varies between
company structures and industries. Industries that require a lot of capital, like
construction and manufacturing, could have turnover ratios that are lower than those
that are service-based and have fewer physical assets.

RECOMMENDATION

 To guarantee the timely delivery of components and raw materials, fortify your ties
with vendors and suppliers. Work closely with suppliers to maximize the effectiveness
of the supply chain and reduce any interruptions that might affect the use of fixed
assets.
 Analyze and track important performance metrics pertaining to fixed asset turnover on
a regular basis. To improve turnover ratios, pinpoint areas that need work, monitor your
progress over time, and make necessary strategy adjustments.

20
AVERAGE COLLECTION PERIOD ( ACP )

ACP = Account Receivables

(Sales / 360)

CALCULATION (2021)
= 295,713
(804,781 / 360)
= 132.3 DAYS
CALCULATION (2022)
= 820,580
( 1,696,521 / 360 )
= 174.1 DAYS
CALCULATION (2023)
= 904,960
( 2,344,830 / 360 )
= 138.9 DAYS

21
GRAPH

AVERAGE COLLECTION PERIOD

200
174.1
180

160
138.9
e 140 132.3
tl
iT
sx i 120
A
100

80

60

40

20

0
2021 132.3
2022 174.1
2021 2022 2023
2023 138.9

ANALYSIS

Average Collection Period for Hibiscus Petroleum Berhad for the year 2021 is 132.3 days. For the
year 2022, it is 174.1 days, and for the following year, 2023, the ratio is 138.9 days.

This indicates that the company’s customers taking a longer time to settle their debts when it's due
in year 2022 compared to the year 2021 and 2023.

22
POSSIBLE CAUSES

 Credit Policies:The average collection period is affected by the terms and conditions that
are provided to customers, such as credit periods and payment terms. Lengthier collection
periods may arise from lenient payment conditions or generous credit procedures.

 Customer Payment Behaviour:The average collection period is directly impacted by the

way clients pay. Prompt payers decrease the collection period; slow-paying or delinquent
clients prolong it.

RECOMMENDATION

 Give consumers who pay their invoices on time discounts or other perks. Customers may be
encouraged to settle their bills sooner by offering discounts for on-time payment, which will
shorten the average collection time.

 To guarantee that invoices are issued on time and accurately, streamline the billing and
invoicing procedures. Make use of automated invoicing solutions to reduce billing delays and
provide bills on time.

23
LEVERAGE RATIOS

DEBT RATIO ( DR)

DR = Total liabilities x 100

Total Assets

CALCULATION (2021)
= 1,314,121 x 100
2,788,043
= 47.13 %
CALCULATION (2022)
= 3,310,401 x 100
5,512,418
= 60.05 %
CALCULATION (2023)
= 3,508,769 x 100
6,198,528
= 56.61 %

24
GRAPH

DEBT RATIO
70
60.05
60 56.61
47.13
50

40

30

20

10

2021 2022 2023

25
ANALYSIS
Debt Ratio for Hibiscus Petroleum Berhad for the year 2021 is 47.13 % . For the year
2022, it is 60.05 % , and for the following year, 2023, the ratio is 56.61 %.

This indicates that the company is borrowing level is high when it's due in year 2022
compared to the year 2021 and 2023.

POSSIBLE CAUSES

 Bussines Risk:A company's debt ratio is influenced by the degree of

operational risk related to its business. While less risky businesses may maintain
lower debt ratios to reduce financial risk, riskier industries or organizations may
have greater debt ratios to sustain operations and investments.
 Asset Intensity:Industries that necessitate significant expenditures in fixed
assets and are capital-intensive may have elevated debt ratios as a result of the
funding requirements for asset acquisition. Debt ratios may be lower in industries
with less stringent asset requirements.
 Revenue And Profitability:Businesses that generate a lot of income and are
profitable can be more likely to take on debt to fund expansion plans. Increased debt
ratios can be caused by and supported by increasing earning potential.

RECOMMENDATION

 Establish specific financial goals based on the company's growth ambitions,

risk tolerance, and preferred capital structure, including target debt ratios.

 Make a thorough analysis of the capital needed for strategic investments,

expansion plans, and ongoing operations. Analyze the best combination of debt
and equity financing to maximize the debt ratio and meet capital demands.

25
DEBT TO EQUITY RATIO ( DER )

DER = Total Liabilities x 100

Total Equity

CALCULATION (2021)
= 1,314,121 x 100
1,473,922
= 89.16 %
CALCULATION (2022)
= 3,310,401 x 100
2,202,017
= 150.33 %
CALCULATION (2023)
= 3,508,769 x 100
2,689,759
= 130.45 %

GRAPH

DEBT TO EQUITY RATIO

2023 2022 2021

130.45

150.33

89.16

0 20 40 60 80 100 120 140 160

26
ANALYSIS

Debt To Equity Ratio for Hibiscus Petroleum Berhad for the year 2021 is 89.16 % . For
the year 2022, it is150.33 % , and for the following year, 2023, the ratio is 130.45 % .

This indicates that the company has more debt to equity ratio when it's due in year 2022
compared to the year 2023 and 2021.

POSSIBLE CAUSES

 Capital Structure Decisions:The debt-to-equity ratio is directly impacted

by management decisions on the usage of debt vs equity financing. The ratio
rises when debt instruments like bonds or loans are issued, but the ratio falls
when equity financing is provided through the sale of stocks.
 Financing Needs:The debt-to-equity ratio is influenced by the
requirement for money to finance working capital requirements,
acquisitions, capital expenditures, and growth activities. In order to meet
their finance demands, businesses may take on more debt, which would
raise their ratios.
 Interest Rates:Interest rate fluctuations have an impact on the price of
debt financing and payback obligations. While higher interest rates may
deter borrowing and lower ratios, lower rates may encourage corporations
to borrow more, leading to higher debt-to-equity ratios.

RECOMMENDATIONS

27
  Determine target debt-to-equity ratios in accordance with business needs, risk
tolerance, industry benchmarks, and financial objectives. Establish
unambiguous benchmarks to direct capital structure choices and guarantee
congruence with strategic goals.

 Perform a thorough analysis of the capital needs for debt refinancing, capital
expenditures, growth plans, and operating expenses. Ascertain the best
combination of debt and equity financing to satisfy funding requirements while
keeping target ratios in place.

28
 C.TIMES INTEREST EARNED ( TIE )

TIE = Earnings Before Interest And Taxes (EBIT)

Interest

CALCULATION (2021)
= 209,782
42,179
4.97 times
CALCULATION (2022)
802,438
61,007
= 13.15 times
CALCULATION (2023)
= 789,341
77,255
= 10.22 times

29
GRAPH

TIMES INTEREST EARNED

14 13.15

12
10.22
10

6
4.97

0
2021 4.97
2022 13.15
2023 10.22

30
ANALYSIS

Times Interest Earned for Hibiscus Petroleum Berhad for the year 2021 is 4.97 times. For
the year 2022, it is 13.15 times, and for the following year, 2023, the ratio is 10.22 times.

This indicates that the company is more able to pay its annual interest payment when it's
due in year 2022 compared to the year 2023 and 2021.

POSSIBLE CAUSES

 Profitability:A higher TIE ratio is a result of higher levels of profitability, as seen

by EBIT. Businesses with strong profits have a larger margin of safety and are
better positioned to pay for interest costs.
 Revenue Growth:Growing sales volumes and revenue streams increase EBIT, which
has a favorable effect on the TIE ratio. Businesses with increasing sales are better
able to use their profits to pay for interest costs.
 Interest Rates:Interest rate fluctuations have an impact on interest costs and the cost
of debt financing. While higher interest rates increase borrowing costs and may cause
the ratio to decline, lower interest rates save interest costs and improve the TIE ratio.

RECOMMENDATIONS

 Boost profitability by streamlining operations, cutting expenses, and maximizing revenue

sources. The TIE ratio will be strengthened by improving margins and producing higher
earnings before interest and taxes (EBIT).
 Reduce operating costs and improve EBIT margins by putting cost-saving strategies and
efficiency measures into place. To increase profitability, simplify procedures, get rid of
waste, and bargain for advantageous terms with suppliers.

31
PROFITIBILITY RATIOS

A. OPERATING PROFIT MARGIN ( OPM)

OPM = EBIT x 100

Sales

CALCULATION (2021)
= 209,782 x 100
804,781
= 26.07%
CALCULATION (2022)
= 802,438 x 100
1,696,521
= 47.30 %
CALCULATION (2023)
= 789,341 x 100
2,344,830
= 33.66 %

32
GRAPH

OPERATING PROFIT MARGIN

2023 2022 2021

33.66

47.3

26.07

0 5 10 15 20 25 30 35 40 45 50

33
 ANALYSIS

Operating Profit Margin for Hibiscus Petroleum Berhad for the year 2021 is 26.07 % . For the
year 2022, it is 47.3 % , and for the following year, 2023, the ratio is 33.66 % .

This indicates that the company is more effectively managed its sales level and generated
higher gross profit for every dollar of sales made when it's due in year 2022 compared to
the year 2023 and 2021.

POSSIBLE CAUSES

 Revenue Growth:Growing revenue streams and sales volumes can have a favorable
effect on the operating profit margin. Increased revenue increases profitability by
distributing fixed costs over a larger base.
 Cost Management:The operating profit margin can be increased by using efficient cost
control strategies, such as cutting manufacturing costs, overhead expenditures, and
operational inefficiencies. Increased profitability can be attained by process optimization,
improved supplier terms negotiated, and resource allocation optimized.
 Poduct Pricing:The operating profit margin is mostly determined by pricing tactics.
Margin can be increased without compromising sales volume by modifying product
prices to match rival pricing, market demand, and value perception.

RECOMMENDATION

 To keep running costs as low as possible while preserving operational effectiveness, put
strict cost management procedures into place. Find wasteful spending areas, simplify
procedures, and bargain with suppliers for advantageous terms to cut expenses without
sacrificing quality.
 Prioritize boosting income by implementing efficient pricing techniques, expanding into
new markets or clientele groups, and upselling and cross-selling. To increase sales,
give high-margin goods and services priority and provide funds for marketing.

34
B .NET PROFIT MARGIN ( NPM )

NPM = Earnings After Taxes (EAT) x 100

Sales

CALCULATION (2021)
= 103,676 x 100
804,781
= 12.88 %
CALCULATION (2022)
= 652,941 x 100
1,696,521
=38.49 %
CALCULATION (2023)
= 400,518 x 100
2,344,830
= 17.08 %

GRAPH

NET PROFIT MARGIN

2021 2022 2023

45
38.49
40

35

30

25

20 17.08
12.88
15

10

35
 ANALYSIS
Net Profit Margin for Hibiscus Petroleum Berhad for the year 2021 is 12.88 % . For
the year 2022, it is 38.49 % , and for the following year, 2023, the ratio is 17.08 % .

This indicates that the company is generated more profit from the amount of
sales generated when it's due in year 2022 compared to the year 2023 and
2021.

POSSIBLE CAUSES

 Revenue Growth:The net profit margin is positively impacted by increasing

sales volumes and revenue streams because they disperse fixed costs over a
bigger revenue base. Increased revenue leads to increased profitability and
economies of scale.
 Cost Management:The net profit margin can be increased by using efficient
cost control strategies, such as cutting manufacturing costs, overhead
expenditures, and operational inefficiencies. Increased profitability can be
attained by process optimization, improved supplier terms negotiated, and
resource allocation optimized.
 Operating Efficiency:Increasing productivity and operational efficiency can
increase the net profit margin. A better level of profitability can be achieved
by investing in automation, technology, and personnel training to minimize
waste and streamline processes.

RECOMMENDATION

 Reduce operating costs by putting cost-cutting initiatives in place without

sacrificing quality. To increase operational efficiency, simplify procedures,
bargain for better terms from suppliers, and make technological investments.
 Prioritize boosting income by implementing efficient pricing techniques,
expanding into new markets or clientele groups, and upselling and cross-
selling. To increase sales, give high-margin goods and services priority and
provide funds for marketing.

34
C .RETURN ON EQUITY( ROE )

ROE = Earnings After Taxes (EAT) x 100

Total Equity

CALCULATION (2021)
= 103,676 x 100
1,473,922
= 7.03 %
CALCULATION (2022)
= 652,941 x 100
2,202,017
= 29.65 %
CALCULATION (2023)
= 400,518 x 100
2,689,759
= 14.89 %

GRAPH

RETURN ON
35
EQUITY
30
29.65
25

20

15
14.89
10

5 7.03

2021 2022 2023

35
ANALYSIS
Return On Equity for Hibiscus Petroleum Berhad for the year 2021 is 7.03 % . For the
year 2022, it is 29.65 % , and for the following year, 2023, the ratio is 14.89 % .

This indicates that the company is generated more profit for every dollar invested in
equity by its shareholders when it's due in year 2022 compared to the year 2023 and
2021.

POSSIBLE CAUSES

 Profitabilty:A higher return on equity is a result of higher levels of profitability

as indicated by net income. Profitability and ROE can be increased by enhancing
revenue growth, minimizing costs, and optimizing operational effectiveness.
 Asset Utilization:Return on equity can be improved by making effective use of
assets. By maximizing asset turnover ratios, including accounts receivable and
inventory turnover, a business can increase ROE by producing more revenue with
less equity investment.
 Capital Structure:Return on equity is impacted by the proportion of debt and
equity funding. Optimizing the debt-to-equity ratio through capital structure
balancing guarantees effective financial resource management and maximizes
return on equity.

RECOMMENDATION
 Set priorities for projects that will increase sales, improve gross margins, and reduce
operating costs in order to increase profitability. To increase profitability, put cost-
cutting measures into place, make pricing strategies more effective, and make
investments in high-margin goods and services.
 Maximize the use of your assets to produce more income with less equity
investment. Increase ROE by controlling inventory levels, speeding up accounts
receivable collections, and optimizing asset productivity to improve asset
turnover ratios.

36
D .RETURN ON ASSET ( ROA )

ROA = Earnings After Taxes (EAT) x 100

Total Assets

CALCULATION (2021)
= 103,676 x 100
2,788,043
= 3.72 %
CALCULATION (2022)
= 652,941 x 100
5,512,418
= 11.84 %
CALCULATION (2023)
= 400,518 x 100
6,198,528
= 6.46 %

GRAPH

RETURN ON ASSET
2021 2022 2023

14

12
11.84
10

6 6.46

4
3.72
2

37
ANALYSIS

Return On Asset for Hibiscus Petroleum Berhad for the year 2021 is 3.72 % . For the
year 2022, it is 11.84 % , and for the following year, 2023, the ratio is 6.46 %.

This indicates that the company is generated more profit for every dollar invested in total
assets when it's due in year 2022 compared to the year 2023 and 2021.

POSSIBLE CAUSES

 Profitability: A higher return on assets is a result of higher levels of

profitability as indicated by net income. Increasing revenue and ROA can be
achieved by reducing costs, boosting operating efficiency, and increasing
revenue.

 Asset Utilization:To maximize return on assets, assets must be used efficiently.

A business can increase ROA by producing more revenue with less asset
investment by optimizing asset turnover ratios, such as accounts receivable and
inventory turnover.
 Asset Quality:Return on assets is influenced by the nature and quality of the
assets. Enhancing ROA can be achieved by selling off underutilized or
underperforming assets and investing in profitable assets with strong returns.

RECOMMENDATION
 Reduce interest costs through capital structure optimization, debt refinancing at
lower rates, and negotiating advantageous financing arrangements. Reducing
interest rates boosts ROA and net income accessible to total assets.
 To safeguard profitability and asset value, handle business risks well and diversify
your sources of income. To keep your return on assets (ROA) steady and
sustainable, identify and reduce market, financial, and operational risks.

38
5 ) MARKET RATIOS

A. EARNING PER SHARE ( EPS)

EPS = Earnings After Taxes (EAT)

No. Of Ordinary Shares Issued

CALCULATION (2021)
= 103,676,000
411,904,400
= RM 0.25
CALCULATION (2022)
= 652,941,000
12,281,592
= RM 53.16
CALCULATION (2023)
= 400,518,000
2,012,418,743
= RM 0.20

40
GRAPH

EARNING PER SHARE

2023 2022 2021

0.2

5 3.16

0.25

0 10 20 30 40 50 60

ANALYSIS

Earning Per Share for Hibiscus Petroleum Berhad for the year 2021 is RM 0.25 . For the year 2022,
it is RM 53.16 , and for the following year, 2023, the ratio is RM 0.20 .

This indicates that the company is more protifible and the firm has more profits to distribute to its
shareholders when it's due in year 2022compared to the year 2023 and 2021.

41
 POSSIBLE CAUSES

 Net Income:Earnings per share rise in direct proportion to net income. Higher EPS is a result
of increasing profitability through better sales, cost-cutting initiatives, and operational
effectiveness.
 Share oustanding:The computation of EPS is impacted by the number of outstanding
shares. Share buybacks increase EPS by reducing the number of shares outstanding and
increasing the value of shares issued through stock offerings or stock-based remuneration,
which dilutes EPS.

 Interest Expense:Interest costs related to debt financing affect EPS and the amount of net
income available to common shareholders. Optimizing interest rates and controlling debt levels
can have a favorable effect on EPS

RECOMMENDATION

 Set priorities for projects that will boost profitability by implementing cost-cutting and
revenue-growth strategies. To increase income, strengthen sales initiatives, investigate
untapped markets, and refine pricing policies. Improve margins and net income by
implementing cost-cutting strategies, streamlining operations, and allocating resources
optimally.
 Invest and fund projects that have the best chance of yielding returns on capital. Prioritize
projects that produce long-term, sustainable earnings growth and have a favorable impact
on EPS by doing in-depth investment analysis.

42
B.DIVIDENS PER SHARE ( DPS)

DPS = Dividend Available To Ordinary Shareholders No.

Of Ordinary Shares Issued

CALCULATION (2021)
= 9,923,000
411,904,400
= RM 0.03
CALCULATION (2022)
= 40,199,000
12,281,592
= RM 3.27
CALCULATION (2023)
= 70,434,000
2,012,418,743
= RM 0.03

43
GRAPH

DIVIDEND PER SHARE

2023 2022 2021

0.03

3.27

0.03

0 0.5 1 1.5 2 2.5 3 3.5

ANALYSIS

Dividend Per Share for Hibiscus Petroleum Berhad for the year 2021 is RM 0.03 . For the year
2022, it is RM 3.27 , and for the following year, 2023, the ratio is RM 0.03 .

This indicates that the company is more protible per share shareholders earned which might have
been distribute as a dividend when it's due in year 2022 compared to the year 2023 and 2021.

POSSIBLE CAUSES
44
 Market Conditions:Decisions about dividend per share can be influenced by industry
dynamics, market trends, and economic conditions. Businesses may modify dividend payments
in reaction to shifts in the macroeconomic environment that impact cash flow and profitability,
as well as pressure from competitors.
 Investor Expectations:The dividend policy and dividend per share decisions of the
corporation are influenced by the expectations and desires of investors about dividend
payments. In order to meet the expectations of shareholders and draw in and keep investors,
companies frequently work to maintain or raise dividends.

 Financial Stability:Dividend payments require solvency and financial stability. For companies
to continue paying dividends without jeopardizing their financial stability, they need to keep
sufficient reserves, acceptable debt levels, and appropriate liquidity.

45
 DIVIDENS PAYOUT RATIO ( DPR)

DPR = Dividend Per Share x 100

Earning per Share

CALCULATION (2021)
0.03 x 100
0.25
= 12 %
CALCULATION (2022)
= 3.27 x 100

53.16
6.15 %
CALCULATION (2023)
= 0.03 x 100
0.
2
0
= 15
%

46
GRAPH

DIVIDEND PAYOUT RATIO

16 15

14
12
12

10

8
6.15
6

2021 2022 2023

ANALYSIS

Dividend Payout Ratio for Hibiscus Petroleum Berhad for the year 2021 is 12 % . For the year
2022, it is 6.15 % , and for the following year, 2023, the ratio is 15 % .

This indicates that the company is more profit back into the business by repurchase share when it's
due In year 2023 compared to the year 2022 and 2021.

47
POSSIBLE CAUSES

 Cash Flow:For dividend payments to be funded, there must be positive cash flow. Firms
possessing robust operating cash flows are able to sustain elevated dividend payout
percentages. Maintaining dividend payments requires careful consideration of both the
predictability and stability of cash flow.
 Tax Considerations:The dividend payout ratio may be impacted by tax issues.
Businesses may modify their dividend policy to maximize tax efficiency and reduce
shareholder and company tax burdens.

 Investment Opportunities:Businesses that have a lot of room to grow profitably could

decide to keep more of their earnings in-house rather than paying them out as dividends. They
might therefore have reduced dividend payout ratios.

RECOMMENDATION

 Make sure the dividend payout ratio is in line with the company's expansion goals and
overarching business plan. Prior to settling on the right payout ratio, consider the company's
investment opportunities, capital requirements, and prospects for future earnings growth.

 Take into consideration implementing a consistent dividend strategy that offers investors
stability and certainty. With this strategy, a commitment to shareholder returns is communicated
while maintaining flexibility to modify dividends in response to cash flow availability and
earnings performance.

48
PRICE EARNINGS RATIOS ( PE)

PE = Current Market Price Of Share

Earning per Share

CALCULATION (2021)
= 2.0125
0.25
= 8.05 times
CALCULATION (2022)
= 2.6750
53.16
= 0.05 times
CALCULATION (2023)
= 2.5400
0.20
= 12.70 times

49
 GRAPH

PRICE EARNING RATIO

14
12.70
12

10
8.05
8

2
0.05
0 2021 2022 2023

ANALYSIS

Price Earning Ratio for Hibiscus Petroleum Berhad for the year 2021 is 8.05 times. For the year 2022,
it is 0.05 times, and for the following year, 2023, the ratio is 12.70 times.

This indicates that the company is faced high inflattions hence the investors when it's due in year
2023 compared to the year 2022 and 2021.

50
POSSIBLE CAUSES

 Earnings Growth:Strong prospects for profits growth frequently translate into higher P/E
ratios for the companies. Stocks that are anticipated to generate greater earnings growth in the
future can command a premium price from investors.
 Profitability:The P/E ratio is influenced by profitability. Investors tend to allocate higher P/E
ratios to companies with larger profit margins and consistent earnings because of these
companies' perceived stability and reliability.
 Industry Performance:Due to variations in growth rates, risk profiles, and market
conditions, P/E ratios might range between industries. When opposed to established or

cyclical industries, industries with good growth prospects or low levels of competition may have
higher average P/E ratios.

RECOMMENDATION

 Compare the P/E ratio of a company with its industry peers to assess its relative valuation.
A lower P/E ratio compared to peers may indicate undervaluation, while a higher ratio
could suggest overvaluation. However, be cautious of comparing across industries with
different growth prospects and risk profiles.

 Analyze the P/E ratio in light of the company's growth prospects. High-growth businesses'
potential for future profits growth makes them fetch higher P/E ratios. On the other hand,
established businesses with consistent profits could have lower P/E ratios.

51
DIVIDEND YIELD ( DY )

DY = Dividend Per Share x 100

Current Market Price Of share

CALCULATION (2021)
= 0.03 x 100
2.0125
= 1.49 times
CALCULATION (2022)
= 3.27 x 100
2.6750
= 122.24 times
CALCULATION (2023)
= 0.03 x 100
2.5400
= 1.18 times

52
GRAPH

Chart Title
2021 2022 2023

122.24

1.49 1.18

ANALYSIS

Dividend Yield for Hibiscus Petroleum Berhad for the year 2021 is 1.49 times. For the year 2022, it
is122.24 times, and for the following year, 2023, the ratio is 1.18 times.

This indicates that the company is going onward might be lower than the currently reported figure
when it's due in year 2022 compared to the year 2023 and 2021.

53
 POSSIBLE CAUSES

 Investor Demand:Variations in dividend yield may be caused by investor demand for

dividend-paying stocks. When stock prices rise, high demand for income-producing assets
may result in lower dividend yields, whereas low demand may result in greater dividend
yields to draw in investors.
 Regulatory Environment:Changes in dividend-related regulations or tax laws may have an
effect on dividend yield. The demand for dividend-paying equities by investors

and the amount of dividend yields can both be impacted by changes in tax rates on dividend
income.
 Sector Trends:The yield on dividends varies depending on the economic sector. Dividend
yields are often higher in sectors like utilities and consumer staples with established business
models and steady cash flows than in growth-oriented industries like technology or healthcare.

RECOMMENDATION

 To reduce risk and take advantage of prospects for dividend yield in a variety of
businesses, spread your investments across several asset classes and sectors.
 Give preference to businesses that have a track record of reliable dividend payments and steady
earnings growth. Examine the cash flow and dividend payout ratio of the company to make sure that
earnings sufficiently support payouts

54
4.0 CONCLUSION

Despite the hurdles presented by shifting oil prices and global economic concerns,
Hibiscus Petroleum Berhad's performance across the fiscal years 2021, 2022, and 2023
displays a dynamic journey distinguished by strategic acquisitions, operational
resilience, and financial growth. The company's overall strong success can be attributed
to its focus on diversifying its asset portfolio and increasing production efficiencies.

In 2021, Hibiscus Petroleum showed incredible dexterity in handling the erratic market
circumstances brought on by the COVID-19 epidemic. The business kept up a solid
financial sheet and added to its manufacturing capacity by carefully acquiring producing
assets. Notably, Hibiscus was set up for major expansion after acquiring the Repsol
properties in Malaysia and Vietnam, greatly boosting its reserves and production levels.

For Hibiscus Petroleum, the year 2022 was crucial as it began to reap the rewards of its
earlier wise investments and acquisitions. A notable increase in production output
resulted from the integration of the recently purchased assets, which enhanced financial
indicators. The business demonstrated the success of its expansion strategy with a
significant increase in revenue and profit margins. Hibiscus also had a strict cost-
controlling schedule, which increased its profitability even more.

Hibiscus Petroleum concentrated on improving operational effectiveness and

technology breakthroughs in 2023, continuing to expand on its growth trajectory. In
order to improve its production and exploration operations, the company made
investments in digitization and data analytics, which enhanced operational efficiency
and decreased costs. The company's dedication to innovation and quality was
demonstrated by the increased manufacturing output and improved financial
performance that these efforts produced.

55
Hibiscus Petroleum has also placed a lot of emphasis on environmental, social, and
governance (ESG) issues over the years. The organization has achieved notable
progress in augmenting its ecological methodologies, encompassing endeavors to
curtail its greenhouse gas emissions and enhance energy efficacy. In order to better
align its operations with international sustainability standards and demonstrate its
commitment to ethical business practices, Hibiscus has been proactive in interacting
with stakeholders and openly disclosing its ESG performance.

The company has successfully used technical breakthroughs, operational efficiencies,

and strategic acquisitions to promote development and profitability, as seen by Hibiscus
Petroleum Berhad's annual reports from 2021 to 2023. With a strong focus on
sustainable growth and value creation for its stakeholders, Hibiscus has established
itself as a powerful competitor in the oil and gas business despite the inherent obstacles
of the industry. Hibiscus has proven its durability and adaptability.

56
5.0 REFFERENCES

 https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=3205086

 https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=3303092

 https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=3396638

 https://www.hibiscuspetroleum.com/corporate-profile/

 http://surl.li/tvypv

57
APPENDIX 2021

58
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63
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2022

66
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74
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2023

79
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