Profit improvement analysis a case study of Air Kelantan Sdn Bhd

Air Kelantan Sdn Bhd (AKSB) is the sole operator for treated water supply company in Kelantan. Total privatization was exercised in the year 1995. Being among the earliest company in Malaysia to be privatized in water industry, AKSB is supposed to progress and excel. Ironically, a company that is...

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Main Author:	Mohd Nor, Ismail
Format:	Thesis
Language:	eng eng
Published:	2009
Subjects:	HD28-70 Management Industrial Management
Online Access:	https://etd.uum.edu.my/5539/1/s91282_01.pdf https://etd.uum.edu.my/5539/2/s91282_02.pdf
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spelling	my-uum-etd.55392016-04-05T02:30:48Z Profit improvement analysis a case study of Air Kelantan Sdn Bhd 2009 Mohd Nor, Ismail Che Razak, Razli College of Business (COB) Othman Yeop Abdullah Graduate School of Business HD28-70 Management. Industrial Management Air Kelantan Sdn Bhd (AKSB) is the sole operator for treated water supply company in Kelantan. Total privatization was exercised in the year 1995. Being among the earliest company in Malaysia to be privatized in water industry, AKSB is supposed to progress and excel. Ironically, a company that is supposed to be a 'bench mark' in the water privatization concept has been lagged behind in terms of management and technology to later company such as Syarikat Air Johor Holding (SAJH), SYABAS, PUAS etc. The annual profit before tax was significantly reduced year after year. Year 2008 has been a dismal year for AKSB as the profit was diminished to 70 per cent compared to what AKSB has obtained in 2007. The income has soaring with the amount of almost RM 10 million from previous year but the profit before tax has shrank to a nasty figure. Therefore the biggest challenge for AKSB management now is to inflate the profit despite the rising operation costs. The analysis shows that AKSB suffers from its high operational costs, lost of income due to Non Revenue Water (NRW), low tariff and bad debts. This project studied the structure of AKSB and most importantly analyzing the NRW problem. AKSB is suffering the NRW at an average of 49 per cent which is among the highest rate in Malaysia. 1 per cent of NRW is equivalent to RM 1.80 million worth of money. In terms of Water Treatment Plant (WTP), the rising of operational costs is partly due to less efficiency of the plants where the production is reduced because of plants ageing. Some plants have to run on over capacity due to budget constraint on upgrading works. From the finding, AKSB has to resolve the NRW problem, as this issue will deteriorate the profitability further. Probably the restructuring process shall be exercised at management level in order to avoid the conflict among the top management and superintendents. The billing and collection units have to be efficient so that the bad debts and ageing collection can be improved. The productivity of employees is another crucial factor that determines the increment in profitability. Most of the employees in AKSB used to work with Jabatan Bekalan Air Kelantan. Working style as government servant is very much different with private employee. Even though AKSB has been privatized and exist more that 10 years ago, the attitude and working style has not been changed and the employees have difficulty to adapt to privatization. So in this case, AKSB has to shift the paradigm in order to remain competitive and able to generate significant profit. 2009 Thesis https://etd.uum.edu.my/5539/ https://etd.uum.edu.my/5539/1/s91282_01.pdf text eng validuser https://etd.uum.edu.my/5539/2/s91282_02.pdf text eng public dba dba Universiti Utara Malaysia Hai, C.N.(2008). The evolution of water supply in Johore : The Malaysia Water Association Bi-Monthly, 7,8-11. Nordin, N., Daud,M.F, Majizat, A. (2009). Application of integrated water resource management principles: Ingenieur, 40, 25-29. Md Ghazali, Z., Water supply management in Johore : The Malaysia Water Association Bi-Monthly, 7, 24-26. Report of audited account for the year ended 31st December 2008 - AKSB Report of audited account for the year ended 31st December 2007 - AKSB Report of audited account for the year ended 31st December 2006 - AKSB
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Che Razak, Razli
topic	HD28-70 Management Industrial Management
spellingShingle	HD28-70 Management Industrial Management Mohd Nor, Ismail Profit improvement analysis a case study of Air Kelantan Sdn Bhd
description	Air Kelantan Sdn Bhd (AKSB) is the sole operator for treated water supply company in Kelantan. Total privatization was exercised in the year 1995. Being among the earliest company in Malaysia to be privatized in water industry, AKSB is supposed to progress and excel. Ironically, a company that is supposed to be a 'bench mark' in the water privatization concept has been lagged behind in terms of management and technology to later company such as Syarikat Air Johor Holding (SAJH), SYABAS, PUAS etc. The annual profit before tax was significantly reduced year after year. Year 2008 has been a dismal year for AKSB as the profit was diminished to 70 per cent compared to what AKSB has obtained in 2007. The income has soaring with the amount of almost RM 10 million from previous year but the profit before tax has shrank to a nasty figure. Therefore the biggest challenge for AKSB management now is to inflate the profit despite the rising operation costs. The analysis shows that AKSB suffers from its high operational costs, lost of income due to Non Revenue Water (NRW), low tariff and bad debts. This project studied the structure of AKSB and most importantly analyzing the NRW problem. AKSB is suffering the NRW at an average of 49 per cent which is among the highest rate in Malaysia. 1 per cent of NRW is equivalent to RM 1.80 million worth of money. In terms of Water Treatment Plant (WTP), the rising of operational costs is partly due to less efficiency of the plants where the production is reduced because of plants ageing. Some plants have to run on over capacity due to budget constraint on upgrading works. From the finding, AKSB has to resolve the NRW problem, as this issue will deteriorate the profitability further. Probably the restructuring process shall be exercised at management level in order to avoid the conflict among the top management and superintendents. The billing and collection units have to be efficient so that the bad debts and ageing collection can be improved. The productivity of employees is another crucial factor that determines the increment in profitability. Most of the employees in AKSB used to work with Jabatan Bekalan Air Kelantan. Working style as government servant is very much different with private employee. Even though AKSB has been privatized and exist more that 10 years ago, the attitude and working style has not been changed and the employees have difficulty to adapt to privatization. So in this case, AKSB has to shift the paradigm in order to remain competitive and able to generate significant profit.
format	Thesis
qualification_name	Doctor of Business Administration (DBA)
qualification_level	Doctorate
author	Mohd Nor, Ismail
author_facet	Mohd Nor, Ismail
author_sort	Mohd Nor, Ismail
title	Profit improvement analysis a case study of Air Kelantan Sdn Bhd
title_short	Profit improvement analysis a case study of Air Kelantan Sdn Bhd
title_full	Profit improvement analysis a case study of Air Kelantan Sdn Bhd
title_fullStr	Profit improvement analysis a case study of Air Kelantan Sdn Bhd
title_full_unstemmed	Profit improvement analysis a case study of Air Kelantan Sdn Bhd
title_sort	profit improvement analysis a case study of air kelantan sdn bhd
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2009
url	https://etd.uum.edu.my/5539/1/s91282_01.pdf https://etd.uum.edu.my/5539/2/s91282_02.pdf
_version_	1747827946746281984

Profit improvement analysis a case study of Air Kelantan Sdn Bhd

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