KUALA LUMPUR: R&A Telecommunication Group Bhd, which has suffered losses for two consecutive financial years since 2012, is confident that it will be able to turn around its businesses in two years, said its chief executive officer Francis Tan Hock Leong.

Based on the telecommunication engineering service provider’s latest second-quarter report ended June 30, 2014 (2QFY14), the group recorded a net loss of almost RM2.6 million. This brings its net loss in the first half of FY14 (1HFY14) to RM5.18 million, more than twice the RM2.17 million loss reported a year ago.

“We are confident of that [turnaround]. The strategy is to build and lease our infrastructure, so as to create recurring income for the group,” Tan told reporters after the group’s extraordinary general meeting yesterday.

Currently, R&A Telecommunication only builds telecommunications infrastructure for operators and earn a one-off income from it.

Tan said the group had obtained shareholders’ approval to proceed with a proposed rights issue to raise at least RM14 million mainly for working capital and bank repayments. It will have to complete the cash call before it begins allocating the necessary funds for the strategy mentioned.

“Currently our order book has piled up to about RM20 million and we are also tendering for other works, which amount to some RM200 million,” said Tan.

The jobs that the group is vying for include the infrastructure for the physical rollout of the long-term evolution (LTE) technology by Malaysian cellular operators, and those related to the rollout of network and application services by the Malaysia Communications and Multimedia Commission (MCMC) under MCMC’s universal service provision (USP) fund, which has an allocated budget of RM2 billion.

Tan revealed that he recently visited Myanmar and Indonesia to explore business opportunities as the group is looking to expand overseas.

“We are also looking to further develop our overseas portfolio. We are exploring going into Indonesia and expect Brunei, via the Outside Plant Project (fibre cable laying project) to continue to contribute to our revenue,” the group said.

On the possibility of appointing Nexgram Holdings Bhd chief executive officer Tey Por Yee to R&A Telecommunication’s board, Tan gave a “not at the moment” answer, but noted that up till now Tey remains just a shareholder and is not involved in the company’s daily operations.

According to R&A Telecommunication’s filing with Bursa Malaysia in early October this year, Tey has, via Nexgram, a 22% indirect stake in the group.

This article first appeared in The Edge Financial Daily, on October 29, 2014.