Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on November 26, 2019

KUALA LUMPUR: Scicom (MSC) Bhd expects to do better in the current financial year ending June 30, 2020 (FY20) after a challenging FY19, thanks to new projects.

Chief executive officer Datuk Seri Leo Ariyanayakam said the group secured between five and 10 projects in FY19, which is expected to be reflected in the performance for FY20.

The projects are in the business process outsourcing (BPO) division, which consists of three areas: customer life cycle management, e-government solutions and e-commerce solutions.

Scicom saw its net profit fall 37% year-on-year to RM20.21 million for FY19, with revenue slipping 2.5% to RM161.16 million.

The lower earnings were because the group secured fewer higher-valued contracts, Leo told reporters after the group’s annual general meeting yesterday.

“Some of our Chinese clients were affected by the trade war, which had a slight impact on us too. But we are expecting to do better this year,” he added.

This is so far reflected in the group’s financial results for the first quarter ended Sept 30, 2019 (1QFY20) released yesterday, which showed that both net profit and revenue rose 24% to RM6.42 million and RM48.09 million respectively.

In a filing with the stock exchange, Scicom said this was contributed mainly by higher revenue from its existing BPO projects and newly secured projects.

The group declared a first interim dividend of 1.5 sen, which will be paid on Dec 24.

Leo said ensuring a better performance is also important so that the group can continue paying a generous dividend which it has been doing for the past several years.

According to Scicom’s annual report for FY19, the group has no formal dividend policy in place, though on average it has declared a payout of approximately 83% of its net profit over the last five years.

On the projects’ value, Leo declined to state a figure for these new projects but disclosed that the sectors include aviation, e-commerce, telecommunications and hospitality, and are based around Asia.

The group is also targeting to secure a contract to track foreign workers. In a previous interview with The Edge Malaysia weekly, Leo said the contract will be awarded by a source country that exports thousands of workers to 12 countries, including Malaysia.

“Yes, it’s looking very positive. We do hope to secure it in this financial year. It has not been computed into our numbers so we do believe we will grow irrespectively. Securing this project will be a good bonus,” he added.

On new markets, Leo noted that last year, the group set up a business in Mauritius, which he said will provide a gateway into the African market.

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