This article first appeared in The Edge Financial Daily on September 14, 2017
KUALA LUMPUR: Datasonic Group Bhd is aiming to achieve a record-high bottom line for its financial year ending March 31, 2018 (FY18), on the back of contracts it secured from the Malaysian government for electronic passport (e-passport) and MyKad materials.
Its highest annual net profit achieved was RM81.9 million in the financial year ended Dec 31, 2013 (FY13). In 2014, the secure identity and personalisation system solutions provider changed its financial year end to March 31.
Speaking to reporters after Datasonic’s annual general meeting yesterday, managing director Datuk Hanifah Noordin said the government contracts the group secured, worth about RM880 million, will last the company for up to five years.
In its first quarter ended June 30, 2017 (1QFY18), Datasonic’s net profit fell 27% year-on-year to RM15.12 million from RM20.79 million, as revenue shrank 21% to RM60.1 million from RM76.08 million.
Hanifah said the lower net profit was partly due to investment in research and development, as well as lower deliverables for national ID cards and passports during the Hari Raya festive season.
Meanwhile, as Datasonic is supplying chips for passports, Hanifah said the company will be taking over the maintenance of all auto-gates in Malaysian airports before end-September for five years.
“[With this], we will also introduce some new technologies to make them (auto-gates) more efficient and secure, as well as more user-friendly,” said Hanifah. However, he noted that Datasonic is still in negotiation with the government on the contract value for the job.
Moving forward, in line with the company’s vision to be a leading security-related solutions provider globally, Hanifah said Datasonic will be offering its expertise for border control (auto-gate and e-Visa) in Tanzania.
Last year, the group announced it was buying a 67% stake in Global Agency Ltd (GAL), a telecommunications equiment firm in Tanzania. Hanifah said Datasonic, through GAL, will be securing a US$192 million (RM804.48 million) contract from the Tanzanian government.
Once materialised, the deal would contribute up to RM15 million per year to Datasonic’s bottom line over eight to 10 years, said Hanifah.
“The global trend is moving into e-passports and moving into chip-based ID cards. With chip-based ID cards and e-passports, we can also do some business intelligence and big data analytics [such as to] forecast the tourist trend [in Tanzania],” Hanifah added.
“We’re still doing the due diligence because this is our first venture overseas. So we want to make sure our investment is secure and safe,” said Hanifah, noting that Datasonic is hoping for the deal to materialise by end-FY18.
Besides Tanzania, Hanifah said the group is also eyeing ID and polycarbonate data page passport projects in other African countries.
Closer to home, Datasonic is looking to enter Indonesia, where it plans to set up a company in the republic for RM3 million by FY18.
Hanifah shared that the prospects of ID solutions remain bright, and Datasonic is looking forward to leverage the growth China’s One Belt, One Road (Obor) initiative will bring.
“China has invested a lot of money in infrastructure [in Obor]. Once the infrastructure is ready, I think the growth will be enormous. We don’t want to miss [the opportunity] because every country needs passports,” said Hanifah.