Financial Information

Quarterly Report For The Financial Period Ended 30 June 2018

Financials Archive

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Unaudited Interim Financial Report For The Period Ended 30 June 2018 Condensed Consolidated Statement Of Financial Position

ECS ICT Financial Position
 

Unaudited Interim Financial Report For The Period Ended 30 June 2018 Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income

ECS ICT Comprehensive Income
 

Review of performance

ECS ICT Financial Position
 

Q1 2018 compared with Q1 2017

Revenue for Q2 FY2018 was affected by cautious consumers spending before 14th General Election and the transitional period of Goods and Services Tax (GST) from 6% to 0%. The Group recorded lower revenue of RM358.2 million, a decrease of 19.2% compared with RM443.5 million last year due to lower revenue from ICT Distribution segment. With lower sales, gross profit (GP) decreased by 9.3% to RM18.2 million from RM20.0 million last year.

With lower sales, the profit before tax (PBT) decreased by 14.9% to RM5.7 million compared with RM6.7 million last year.

Quarterly Segmental Result

The performance of the three business segments for Q2 FY2018 compared with Q2 FY2017 were as follows:

  1. ICT Distribution

    Revenue decreased by 27.2% with lower sales mainly from Notebook and mobility products namely tablets and smartphones. With lower sales and GP, the PBT decreased by 52.3% to RM1.8 million compared with RM3.7 million last year.

  2. Enterprise Systems

    Revenue increased by 8.8% with higher sales from servers, storage and networking. With higher sales and better GP margin, the PBT increased by 58.4% to RM3.3 million compared with RM2.1 million last year.

  3. ICT Services

    Revenue increased by RM1.7 million. With higher revenue and GP, the PBT increased to RM182,000 compared with RM137,000 last year.

6 months ended 30.6.2018 compared with 30.6.2017

The Group's revenue for 6 months ended 30.6.2018 was affected by slower market sentiments prior to 14th General Election and transitional period of GST from 6% to 0%. The Group recorded revenue of RM750.0 million, a decrease of 16.7% compared with RM900.3 million last year mainly due to lower revenue from ICT Distribution segment.

With lower sales and foreign exchange loss of RM354,000 compared with gain of RM294,000 last year (Note 17), the PBT decreased by 12.8% to RM11.6 million compared with RM13.3 million last year.

Year-to-date Segmental Result

The performance of the three business segments for 6 months period ended 30 June 2018 as compared to previous year-to-date were as below:

  1. ICT Distribution

    Revenue decreased by 26.0% with lower sales across all products in ICT Distribution Segment. With lower sales and GP, the PBT decreased by 46.1% to RM4.2 million compared with RM7.8 million last year.

  2. Enterprise Systems

    Revenue increased by 21.7% mainly due to higher sales from servers, networking and storage. With higher sales and GP, PBT increased by 61.2% to RM6.0 million compared with RM3.7 million last year.

  3. ICT Services

    Revenue increased by RM2.6 million mainly due to higher revenue of Enterprise Systems. With higher sales and GP, the PBT increased to RM380,000 compared with RM252,000 last year.

Prospects

The market uncertainties following the 14th General Election on 9 May 2018 have impacted both the consumer and corporate spending on ICT products. The impact on the reintroduction of the Sales and Services Tax on 1st September 2018 remains uncertain on ICT products.

Many public sector and GLC projects were deferred and the delays have impacted our enterprise sales on server, storage and networking products. We shall continue to grow our private sector revenue to cover the shortfall of business from the public sector.

The outlook for the second half of FY2018 remains to be challenging but we expect improvement in 4th quarter with higher sales of consumer ICT products and increase in corporate spending on ICT equipment from their year-end budget.