Friday 29 Mar 2024
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CYBERJAYA (June 14): Datasonic Group Bhd will have to relook at its initial expectation of surpassing RM100 million mark of net profit in its financial year ending March 31, 2019 (FY19) after the change of government following the Pakatan Harapan coalition's victory in the 14th general election (GE14).

Nevertheless, as he spoke to reporters after the group's extraordinary general meeting (EGM) today, managing director Datuk Abu Hanifah Noordin believes that Datasonic's offering will remain appealing to the new government.

"We have to relook at it (RM100 million profit mark for FY19) and rely on the new government; of course those projects that we want to push through will still be the initiatives we want to proceed with, but as I said we are dealing with new people, they have various priorities, constraints and objectives, which are different from the previous government," he said.

Datasonic posted a net profit of RM67.24 million for FY18, which was 7.32% higher than RM62.66 million in FY17, despite revenue falling 18.77% year-on-year to RM258.6 million, from RM318.35 million previously.

In May this year, Hanifah reportedly said Datasonic was expected to see its net profit surpass the RM100 million mark for the first time in FY19, driven by growth across all its business segments as the group set its sights on penetrating new foreign markets, part of its aim to be a leading security-related solutions provider in the region by 2020 and in the global market by 2025.

"All the proposals that we have been putting in the past will have to start again from zero and (we) have to work with the new people, because as far as the government servants are concern, the new ministers will be calling the shots," Hanifah said today.

Having said that, Hanifah added Datasonic's offerings are still the cheapest and have best value proposition in the market.

"We have always been lowest, which is lower than the previous tender. Our projects were mainly from competitive tenders. If we had negotiated tenders, it was because it was related to or part of the competitive tender we have secured, so it was not as though we were handed these projects on a silver platter," he said.

"For example our passport project, when we first introduced them, it was 15% cheaper than the existing vendor, and if you look at the quality of our passports, they are 10 times better. So we will continue to give the government the cheapest and the best," he added.

Earlier the EGM, which sought to pass a resolution of issuing 675 million free warrants on the basis of one free warrant for every two shares, saw 100% of attended shareholders approved the issuance.

The warrants will have a five-year tenure to be converted into ordinary shares.

Since the GE14, certain public-listed government service providers have been suffering investors' selldown.

While Datasonic is also a government service provider, its share price has been holding firm around the 90 sen region even after the new government took over Putrajaya.

As at 11:26am today, the counter was trading at 94.5 sen, down by 0.5 sen or 0.53%. This is also a marginal decline from the group's closing price of 95 sen on May 8, the day before GE14's polling date.

Year to date, Datasonic's share price fell by 18.53% from RM1.16 on Dec 29 last year.

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