CYBERJAYA (Nov 27): Prestariang Bhd president and group CEO Dr Abu Hasan Ismail said the company is ready to put the termination of its RM3.5 billion National Immigration Control System (SKIN) project by the government behind it and focus on rebooting its operations to become profitable again.

A challenging year that is compounded with the termination of the government project in December last year further impacted the company's performance for the 18-month period from Jan 1, 2018 to June 30, 2019 (18MFY19), with net loss swelling ten times to RM21.27 million from RM2.2 million for the 12-month period ended Dec 31, 2017 (FY17).

This was despite revenue for 18MFY19 jumping 2.6 times to RM367.32 million from RM141.45 million in FY17.

It should be noted that this year, the group changed its financial year end from Dec 31 to June 30, resulting in the 18-month length of its recently-concluded financial year.

"The losses were driven by provisioning, writedowns and also changes in accounting standards. But we see a lot of that as being behind us. We want to focus on rebuilding the company," Abu Hasan told reporters after the group's annual general meeting here.

To recap, Prestariang won the 15-year contract to install SKIN for the Home Ministry in August 2017, but the contract was unilaterally terminated by the government in a letter dated Dec 11, 2018.

After failing to reach an agreement on the compensation amount, the company took the government to court to resolve the matter.

The company filed an originating summons to have the amount ascertained by the court.

The group CEO said the court has fixed July 1, 2020 for the next hearing on the matter.

In the meantime, the company will focus on transforming its operations to make it resilient in tough economic times.

This will, however, take some time, said Abu Hasan, who is the founder of the company.

"I started the company about 16 years back. If you see how we grow the business, before the termination of SKIN, we were on the right direction to be a regional player. That has always been our ambition.

"When we did SKIN, it was supposed to give us recurring revenue via the PPP (public-private partnership) model. But when the government terminated the contract, the message to us is to focus on what we can control.

"So we need to reboot. We also want to move away from project-based revenue and find more recurring revenue streams, especially to replace the portion that the SKIN project had provided," he added.

Abu Hasan said the company is actively looking for new information technology partners while looking internally to increase monetisation.

He also acknowledged the material uncertainty that was recently raised by its independent auditor Crowe Malaysia PLT on the company's ability to continue as a going concern factoring in Prestariang's negative operating cash flow and net losses.

"The reason we have negative cashflow is because we invested in SKIN. It has tied up a lot of our capital, and so that's why we are looking to monetise our assets and investments.

"At some point we may have to go back to the market. For now we want to work with the assets that we have within the organisation to free them up and redeploy them to provide income for the business.

"We are confident of the going concern. The cause raised by the auditor has been put [behind] as we are no longer investing in SKIN anymore. I believe it will get better," he said.

At the midday break, shares of Prestariang settled one sen or 2.22% lower at 44 sen, valuing it at RM217.04 million.