Kronologi 2Q net profit jumps by more than 2 times

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KUALA LUMPUR (July 28): Kronologi Asia Bhd saw its net profit for its second quarter ended June 30, 2017 (2QFY17) jumping by more than 2 times to RM4.1 million, from RM1.7 million in the corresponding quarter a year ago.

Similarly, the group recorded a stronger revenue, increased by 227.1% to RM48.3 million in 2QFY17, as compared with RM14.8 million in 2QFY16.

“The strong improvement in our results comes on the back of our successful acquisition of Quantum Storage (India) Pte Ltd (“QSI”), as well as the increased focus on disaster recovery and business continuity following the recent cyber-attacks. We will remain focused on the roll-out of transnational data backup storage solutions in Asia, to bring added value to our customers and help them minimise business interruptions,” Acting Chief Executive Officer, Chief Technology Officer and Executive Director of Kronologi, Philip Teo said.

A press release by Kronologi said growth continues to be powered by strong activity in the EDM (enterprise data management) Infrastructure business, although the product mix during the quarter included lower margin products.

For the first half of financial year ended June 30, 2017 (1HFY17), Kronologi almost doubled its net profit to RM6.12 million, from RM3.07 million in the 1HFY16. During the same period, the group managed to grow its revenue by 154.3% to RM73.5 million, from RM28.9 million.

Singapore is the group’s major revenue contributor for the 1HFY17, accounting for RM46.8 million or 63.6%, followed by other South East Asia countries which accounted for RM10.7 million or 14.6%, while India contributed about RM8.1 million or 11.1% of the group’s total revenue.

In order to meet the investment needs of the group’s transnational data backup solution roll-out, Kronologi announced the approved private placement of new shares to enable the group to raise additional funds expeditiously.

On its prospect, the note filed with Bursa said demand for data backup is being driven by the proliferation of data such as emails, staff and business records, legal documents and more.

“Compliance with tighter regulations and business continuity requirements have led to the need for companies to safeguard their data more than ever before,” Kronologi said.

The group expects financial performance for its year ending Dec 31, 2017 (FY17) to be better than FY16, in view of its strong first half performance.

As of market close today, Kronologi gained 2.9% to 71 sen, with 14.98 million shares exchanging hands, giving it a market capitalisation of RM194.7 million. Year-to-date, the group has surged by 129.0% and has grown by 246.3%, as compared with a year ago. At current levels, Kronologi is trading at a trailing P/E of 21.7 times.