INTRODUCTION

Harbour-Link Group Berhad is an investment holding company. This

company has provides total logistics, engineering, procurement and construction
services in Malaysia and Singapore.
It operates in four segments, which are Shipping and Marine Services,
Logistic Services and Equipment Rental, Engineering Works, and Property
Development. The companys shipping and marine services comprise chartering
and ship management, bunkering or material supplies, full liners, tankers,
container or conventional cargo handling, marine support and supplies, tug or
barge, LCTs, and coastal shipping services, as well as container liner, chartering,
and

stevedoring

services.

Its

integrated

logistics

services

include

land

transportation, freight forwarding, warehousing, heavy haulage, heavy lifting and

installation works, and packing and removal services; and equipment leasing and
rental services for trucks, trailers, prime movers, forklifts, sky masters, cranes,
tractors, and rollers. The company also undertakes engineering projects, such as
LPG, LNG, chemical, effluent and water treatment plants, plant revamps and
upgrades, flow lines and metering stations, gas treatment and compression
facilities, onshore pipelines, pump and compressor stations, oil-gas and
cryogenic facilities, and depot and tank farms.
In addition, it undertakes civil and infrastructure works, including road
works, drainage systems, slope and shore protection, pipelines and piping works,
piling and foundation, structural works, and earth works; and building or
construction works, such as plant and factories, power stations and sub-stations,
extensions, modifications and repairs, roofing, blasting, and painting.
Further, the company is involved in the agriculture and property
development, trade of petroleum and petrochemical products, provision of road
safety, training, and consultancy services, property rental activities, and sale of
pallets. Harbour-Link Group Berhad was founded in 1975 and is headquartered in
Bintulu, Malaysia.

COMPANY BACKGROUND
Harbour-Link Group Company has starts their business in the east
Malaysia state of Sarawak on year 1975 with operates on freight-forwarding and
shipping

industry.

After

freight-forwarding

and

shipping

industry,

these

companies expand their business on proving transportation and forwarding

services to Sarawak Shell Berhad and also to other related oil and gas companies
which handful of dedicated employees and limited facilities. In late 1970, the
discovery of large reserve of natural gas in Bintulu has opened the business
opportunity to Harbour-Link Group open it base at Bintulu. In the 1980s & 90s,
when major petrochemical projects such as Malaysia Liquefied Natural Gas
(MLNG), ASEAN Bintulu Fertiliser (ABF), and Shell MDS (Middle Distillate
Synthesis) began to establish their plants at Bintulu as well as the mushrooming
of timber related industries within the region, Harbour-Link Group was
established to provide logistics services for these projects.
From the business that based on local shipping ad forwarding agent,
Harbour-Link Group expanded their services in customs tax consultation services,
customs brokerage and documentation to warehousing, transportation, air, sea
and land freight to heavy haulage, mechanical erection or installation, ship
chartering, supply chain management and other specialized industrial logistical
support services, which are available nationwide and across the intra-Asian
region. Harbour-Link Group has now forged into the shipping line industry with
the acquisition of container and general cargo vessels. This move is a logical
extension of the groups value chain that promotes end-to-end shipment visibility
and will enable us to continue fulfilling our commitment of providing services to
our customers that are both comprehensive and flexible.

FINANCIAL RATIO AND ANALYSIS HARBOUR-LINK GROUP BHD

1. Liquidity ratios
Current Ratio =

Current assets
Current liabilities

2014 = RM 224,633,588
197,211,969
RM 147,418,672
151,455,686
= 1.52 times
times
2011 = RM 124,887,085
RM 90,499,213
= 1.38 times

2013 = RM 199,353,464

2012 =

RM 138,115,726

RM
RM

= 1.44 times

1.30

2010 = RM 123,461,099
RM 78,583,634
= 1.57 times

Quick Ratio = Current Asset - Inventories

Current liabilities
2014 = RM_224,633,588 RM 3,248,6380
2,840,727
RM 147,418,672
= 1.30 times
2012 = RM 197,211,969 - RM 2,788,002
2,827,903
RM 151,455,686
= 1.28 times

2013 = RM 199,353,464 RM
RM 138,115,726
= 1.42 times
2011 = RM 124,887,085 RM
RM 90,499,213
= 1.35 times

2010 = RM 123,461,099 RM 2,412,999

RM 78,583,634
= 1.54 times
Average Collection Period =
Account Receivable
Annual Credit Sales/365 days
2014

= ___RM 88,328,151__
(RM 457,562,862/365)
= 70.46 days

2012 = __RM 104,007,804__

2013 = _ RM 105,181,265___
(RM 422,707,999/365)
= 90.82 days
2011= ___RM 63,572,309__
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(RM 472,972,827/365)
= 80.26 days

(RM 308,706,126/365)
= 74.92 days

2010 = __ RM 57,796,433___
(RM 357,059,509/365)
= 59.08 days

Inventory Turnover = Cost of Goods sold

Inventories
2014 = RM 378,975,968
414,901,799
RM 3,248,638
= 116.66 times

2013 = RM 353,263,317

2011 = RM 314,370,195
RM 2,827,903
= 111.17 times

2010 = RM 264,273,962
RM 2,412,999
= 109.52 times

RM 2,840,727
= 124.36 times

2012 = RM
RM 2,788,002
= 148.82 times

Liquidity ratios are used to measures of the ability of a firm to pay its bill in a
time timely manner when they come due. The current ratio is mainly used to
give an idea of the company's ability to pay back its short-term liabilities with its
short-term assets. A ratio under 1 suggests that the company would be unable to
pay off its obligations if they came due at that point. The higher the current ratio,
the more capable the company is of paying its obligations. During the past 5
years, the highest current ratio of Harbour-Link Group are 1.57 times on 2010,
the median is 1.44 times, the lowest current ratio are 1.30 times on 2012.
The quick ratio measures a company's ability to meet its short-term
obligations with its most liquid assets. During the past 5 years, the highest Quick
Ratio was 1.54 times on 2010. The lowest was 1.28 times in 2012, and the
median was 1.35 on 2011. The higher the quick ratio, the better the company's
liquidity position.
Average Collection Period are the approximate amount of time that it takes
for a business to receive payments owed, in terms of receivables, from its
customers and clients. The trend for past 5 years, the Average Collection Period
was slightly more liquid in 2010 that only collects its account receivable in 59.08
days compare to the other receivables. At the median was 74.92 days on 2011
and the less liquid are 90.82 days in 2013. Therefore, possessing a lower
average collection period is seen as optimal, because this means that it does not
take a company very long to turn its receivables into cash.
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Inventory Turnover measures how fast the company turns over its
inventory within a year. A higher inventory turnover means the company has
light inventory. Harbour-Link Group Bhd are best manage their inventories on
year 2012 where the Inventory Turnover 148.82 times more efficiently than the
other years. The median was 116.66 times on 2014 and the lowest was 109.52
times on 2010.

2. Capital Structure ratios

Debt Ratio =

Total Debt
Total Assets

2014
=
RM 237,276,187
237,394,394
RM 486,410,183
447,867,977
= 49 %
2011 = RM 184,637,931
RM 438,407,178
= 42%

2013 = RM 227,407,144

2012 = RM

RM 444,109,012
= 52%

RM

= 53%

2010 = RM 144,472,050
RM 386,676,797
= 37%

Debt Ratio is the financial ratio that measures the extent of a companys or consumers
leverage. A debt ratio of greater than 1 indicates that a company has more debt than assets
and determine company's risk level . During the past 5 years, the highest Debt Ratio was

53% on 2012. The lowest was 37% in 2010, and the median was 49% on 2014. Thus,
Harbour-Link Group Bhd used significantly more debt in 2012 than the other average of
years.
3. Asset Management Efficiency ratios
Total Asset Turnover = ___Sales__
Total Asset
2014 = RM457,562,862
RM 486,410,183
447,867,977
= 0.94 times
times
2011 = RM357,059,509
RM 438,407,178

2013 = RM422,707,999 2012 = RM472,972,827

RM 444,109,012
RM
= 0.95 times

= 1.06

2010 = RM308,706,126
RM 386,676,797
5

= 0.81 times

= 0.80 times

Fixed Asset Turnover = ________ Sales_________

Net Plant and Equipment
2014 = RM457,562,862
RM197,074,382
= 2.32 times
2011 = RM357,059,509
RM157,705,889
= 2.26 times

2013 = RM422,707,999 2012 = RM472,972,827

RM187,988,222
RM166,205,806
= 2.25 times
= 2.85 times
2010 = RM308,706,126
RM152,263,822
= 2.03 times

Total Asset Turnover Ratio (TATO), which represents the amount of sales
generated per dollar invested in the firms assets. Thus, TATO is a measure of
how well the firms assets are managed. It appears that Harbour-Link Group Bhd
is using it assets more efficiently in 2012 than other years, because it generates
about RM 1.06 in sales per dollar of assets. While, the median are RM 0.94 and
the lowest are RM 0.80. Harbour-Link Group Bhd appears to have managed the
use of fixed asset in 2012.
Fixed asset turnover ratio compares the sales revenue a company to its
fixed assets. If a company has a high fixed asset turnover ratio, it shows that the
company is efficient at managing its fixed assets. This comparison will tell
whether the companys performance is improving or decline over the years. The
trend for 5 years of Harbour-Link Group Bhd show the highest Fixed Asset
Turnover it generated was RM 2.85 of revenue per $1 dollar of its net fixed assets
over the year on 2012. The median was RM 2.26 on 2011 and the lowest was RM
2.03 in 2010.

4. Profitability ratios
Gross Profit Margin = Gross Profits
Sales
2014 = RM 78,586,894
58,071,028
RM 457,562,862
472,972,827
= 17.18 %

2013 = RM 69,444,682

2011 = RM 42,689,314

2010 = RM 44,432,164

2012 = RM

RM 422,707,999
= 16.43%

RM
= 12.28%

RM 357,059,509
= 11.96%

RM 308,706,126
= 14.39%

Operating Profit Margin (OPM) = Net Operating Income or EBIT

Sales

2014 = RM 45,334,957
RM 457,562,862
= 9.91%

2013 = RM 15,600,559
RM 422,707,999
= 3.69%

2011 = RM 18,460660
RM 357,059,509
= 5.17%

2010 = RM 25,197,516
RM 308,706,126
= 8.16%

2012 = RM 28,849,240
RM 472,972,827
= 6.1%

Net Profit Margin (NPM) = Net Income

Sales
2014 = RM 36,349,158
26,008,821
RM 457,562,862
=
7.94%

2013 = RM 6,549,978

2011 = RM 13,257,009
RM 357,059,509
=
3.71%

2010 = RM 18,241,142
RM 308,706,126
= 5.91%

RM 422,707,999
= 1.55%

2012

RM

RM 472,972,827
= 5.5%

Operating Return on Asset (OROA) = Net Operating Income or EBIT

Total Assets
2014 = RM 45,334,957 2013 = RM 15,600,559
2012 = RM 28,849,240
RM 486,410,183
RM 444,109,012
447,867,977
= 9.32 %
= 3.51%
= 6.44 %
2011 = RM 18,460660
RM 438,407,178
= 4.21 %

Return on Equity =

RM

2010 = RM 25,197,516
RM 386,676,797
= 6.52 %

__Net Income_
Common Equity

2014 = RM 36,349,158
26,008,821
RM 230,919,229

2013 = RM 6,549,978
RM 201,354,456

2012

RM

RM 267,478,068
7

= 15.74 %

= 3.25 %

= 9.72 %

2011 = RM 13,257,009
RM 243,988,512
= 5.43 %

2010 = RM 18,241,142
RM 237,621,847
= 7.68 %

Gross Profit Margin is the percentage of gross profit out of sales or revenue. Companies can
be categorized by their Gross Margin if greater than 40% it consider durable competitive
advantage, less than 40% competition eroding margins, less than 20% no sustainable
competitive advantage. The trend for past 5 years, the highest Gross Profit was 17.18% in
2014. The median was 14.39% in 2010 and the lowest was 11.96% in 2011.
The operating profit margin measures how well the firm is managing its
income statement. During the past 5 years, the highest Operating Profit Margin
of Harbour-Link Group Bhd was 9.91% on 2014. The median was 6.1% on 2012
and the lowest was 3.69% in 2013. While the remaining 5.17% and 8.16% on
2011 and 2010 respectively.
Net profit margin is a key financial indicator used to asses the profitability
of a company. The trend for 5 years show the highest was 7.94% net income per
dollar of sales revenue in 2014 than the other years. The median was 5.5% on
2012 and the lowest was 1.55% in 2013. While the remaining 3.71% and 5.91%
on 2011 and 2010 respectively.
The lower OROA ratio indicates that the firms cost are higher per dollar of
revenues than the firm with the higher OROA. The highest was 9.32% which
generated an average RM 0.0932 for every RM 1 of their assets. The median was
6.44% in 2012 and the lowest are 3.51% on 2013.

Return on Equity (ROE) measures the rate of return on the ownership interest of the
common stock owners. It measures a firm's efficiency at generating profits from every unit of
shareholders' equity. ROE shows how well a company uses investment funds to generate
earnings growth. ROE between 15% and 20% are considered desirable. The highest Return
on Equity are 15.74% on 2014, the median 7.68 on 2010 and the lowest was 3.25%

5. Market Value Ratios

Price/Earnings Ratio = Market Price per Share
Earnings per Share
2014 =

_________RM 1.870__________

2013 = __________RM 0.900_________

(RM 6,549,978/RM 182,000,002)

182,000,002)
= RM 1.870
= 10.39 times
RM 0.18
2012 = __________RM 0.875__________
(RM 26,008,821/RM 182,000,002)
182,000,002)
= RM 0.875 = 5.83
times
times
RM 0.15

(RM36,349,158/RM
= RM 0.900
RM 0.03

= 30 times

2011=__________RM 0.970__________
(RM 13,257,009/RM
= RM 0.970

= 13.86

RM 0.07

2010 = __________RM 0.765_________

(RM 18,241,142/RM 182,000,002)
= RM 0.765 = 7.65 times
RM 0.10

Market-to-Book Ratio = Market Price per Share

Book Value per Share
2014 = _________RM 1.870____________
0.900__________
(RM 230,919,229/RM 182,000,002)
182,000,002)
= RM 1.870 = 1.47 times
times
RM 1.27
2012 = __________RM 0.875__________
0.970__________
(RM 267,478,068/RM182,000,002)
182,000,002)
= 0.875
= 0.60 times
1.47

2013 = _________RM
(RM 201,354,456/RM
= RM 0.900

= 0.81

RM 1.11
2011=__________RM
(RM 243,988,512/RM
= RM 0.970
RM 1.34

= 0.72 times

2010 = ___________RM 0.765_________

(RM 237,621,847/RM 182,000,002)
= RM 0.765 = 0.58 times
RM 1.31

Market value ratios is used to compare the market value of a firms shares to either the book
value per share or earnings per share. It is include of price earnings ratio and market to book
ratio. During the past 5 years, the Price Earning Ratio was 30 times on 2013. The median was
9

10.39 times on 2014 and the lowest was 5.83 times in 2012. While, the highest Market to
Book Ratio was 1.47 times on 2014, the median was 0.72 the lowest was 0.58 times in 2010.

CONCLUSION
Summing Up the Financial Analysis of Harbour-Link Group Berhad
From the trend analysis, it shows that Harbour-Link Group Berhad shows
good financial performance. Our analysis revealed the following clues about
Habour-Link Group Berhad financial performance:

Liquidity - Harbour-Link Group Berhad liquidity ratios are adequate to

good. Quick ratio, slightly decrease, but still it shows that Harbour has RM

1.30 liquid assets available to cover each RM 1 current liabilities.

Financial Leverage - Harbour-Link Group Berhad used more assets to
finance its investments than the previous year. This suggests that

Harbour-Link Group Berhad has lower financial risk.

Profitability Harbour-Link Group Berhad profitability ratios are good.
Gross Profit Margin is increasing as compared to previous year. The larger
the gross profit margin, the better for the company. Operating profit
margin also increase from previous year. It is a good sign as this shows the
company is healthy and growing. Net profit margin shows how much of
each sales ringgit shows up as net income after deducting all expenses. In
2014, it shows that for every RM 1, 7.94 cents is profit. The value is higher
than previous year. Return on assets percentage is also increase. It is
better than the previous year as this means Harbour-Link Group Berhad is
doing a good job using its assets to generate sales. Return on equity
10

measures the return on the money the investors have put into the
company. The percentage also greater than the previous year compared to

the previous year.

Market Value Ratios market value ratios relates that Harbour-Link Group
Berhad market value per share to its book value per share. It indicates the
management success in creating value for its stockholder as the ratio
value is greater compared to previous year.
In conclusion, Harbour-Link Grop Berhad financial performance is better

compared to previous year. This means that, the company is worth to be

investing in it and the investors do not need to worry about the financial risk as
Harbour-Link Group Berhad has low financial risks.

REFERENCE
Harbour-link group berhad. (2015). Retrieved from
http://www.harbour.com.my/
Financial Times. (2015). Retrieved from
http://markets.ft.com/research/Markets/Tearsheets/Business-profile?
s=HARBOUR:KLS
Harbour-link lines. (2015). Retrieved from
http://www.hll.com.my/about%20us.html

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