KUALA LUMPUR (Nov 9): ACE Market-listed enterprise data management and storage solutions firm Kronologi Asia Bhd expects to see sequential growth in the upcoming October-December 2020 quarter as most businesses where it has a presence continue to recover from the pandemic amid gradual resumption of activities.

“One of the driving factors for the sequential growth for our fourth quarter result is the market starting to recover. [Also, with this pandemic] today, digitalisation is not a choice, all companies have to somehow go online or in the cloud to get their business going. Hence, the demand for data generated is tremendous. This is one of our biggest driving factors,” said its chief executive officer Edmond Tay Nam Hiong during a video briefing today on the group’s latest financial results.

At noon break, the firm announced that its net profit for the quarter ended Sept 30, 2020 almost tripled quarter-on-quarter due to higher revenue and lower operating expenses.  

In a bourse filing, the company announced that its July-Sept 2020 net profit was RM4.9 million, which is higher than the RM1.24 million posted in the immediate preceding April-June quarter, while revenue increased 43.6% in the same period to RM59.24 million versus RM41.26 million.

Meanwhile, operating expenses fell 18% to RM5 million from RM6.1 million a year ago.

Nonetheless, the group remained in the red for the first nine months from January to September 2020, where it reported a cumulative net loss of RM5.10 million versus a cumulative net profit of RM15.53 million a year ago, while its cumulative revenue shrank 8.28% to RM152.47 million from RM166.23 million previously.

It is worth noting that the group had in the Jan-March 2020 quarter incurred a one-time non-cash impairment for its property, plant and equipment amounting to RM11.64 million.

The group has changed its financial year end to Jan 31 from Dec 31, previously. 

Commenting on the group’s latest quarterly result, its executive director Tan Jeck Min said the disruption from Covid-19 on Kronologi’s performance is only temporary. 

According to him, the group sees gradual and positive recovery trends across geographies and vertical markets, supporting its belief that the first half of the year was the trough in its business and customers are now adapting to a new normal of buying behaviour.

He added that the improvement in the July-Sept 2020 quarter showed that Kronologi has returned to “pre-pandemic level”.

Its profit from operations was RM5.53 million for the quarter, up 155.69% from RM2.16 million in the previous quarter and 452.25% higher compared to RM1 million in the Jan-March 2020 quarter. 

Meanwhile, revenue for July-Sept 2020 was 43.6% higher compared to RM41.26 million in March-June 2020 and 14% higher against RM51.97 million in Jan-March 2020.

He also attributed the growth in July-Sept 2020 earnings to the improvement of the Philippines and Singapore markets.

Singapore is the group’s largest revenue contributor for July-Sept 2020, generating RM36.99 million, up 66.17% from RM22.26 million in March-June 2020, after the country’s two-month “circuit breaker” lockdown measures were lifted on June 2.

Meanwhile, the Philippines contributed RM15.43 million in revenue, 54.76% higher than RM9.97 million in the previous quarter.

When asked if there is any concern for the Malaysian market with the re-introduction of conditional movement control order by the government since October, Tay said the restrictions are not expected to badly affect the group’s performance as its operations are well spread throughout Asia.

Kronologi shares closed at half a sen or 0.84% lower at 59 sen, bringing its market capitalisation to RM308.79 million. Some 17.35 million shares were traded.

However, the counter has rebounded 74% since its March low of 34 sen.