Financial Information

Quarterly Report For The Financial Period Ended 31 December 2017

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Unaudited Interim Financial Report For The Period Ended 31 December 2017 Condensed Consolidated Statement Of Financial Position

ECS ICT Financial Position
 

Unaudited Interim Financial Report For The Period Ended 31 December 2017 Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income

ECS ICT Comprehensive Income
 

Review of performance

ECS ICT Financial Position
 

Q4 2017 compared with Q4 2016

For Q4 FY2017, the Group recorded lower revenue of RM501.2 million, a decrease of 9.1% compared with RM551.6 million last year due to lower revenue from ICT Distribution segment. With lower sales, gross profit (GP) decreased by 5.6% to RM26.4 million compared with RM28.0 million last year

For Q4 FY2017, the distribution expenses increased by 48.2% to RM7.2 million from RM4.9 million last year due to a reversal of impairment on trade receivables of RM3.2 million last year. With lower sales and higher reversal of impairment on trade receivables last year, profit before tax (PBT) decreased by 9.2% to RM15.2 million compared with RM16.7 million last year.

Quarterly Segmental Result

The performance of the three business segments for Q4 FY2017 compared with Q4 FY2016 were as follows:

  1. ICT Distribution

    Revenue decreased by 15.7% with lower sales mainly from Notebook, PC and mobility products namely tablets and smartphones. However, with improved product mix and lower sales related expenses, the PBT increased by 8.9% to RM9.5 million compared with RM8.7 million last year.

  2. Enterprise Systems

    Revenue increased by 12.5% with higher sales from servers and workstation. However, with lower GP margin in this quarter and higher reversal of impairment on trade receivables in previous year's quarter, the PBT decreased by 34.8% to RM4.5 million compared with RM6.9 million last year.

  3. ICT Services

    Revenue increased by RM3.2 million. However, with lower GP margin and higher operating expenses, the PBT decreased to RM298,000 compared with RM528,000 last year.

12 months ended 31.12.2017 compared with 31.12.2016

For 12 months period ended 31 December 2017, the Group recorded revenue of RM1,855.0 million, an increase of 1.7% compared with the previous year's corresponding period of RM1,823.4 million mainly due to higher revenue from ICT Distribution segment. However GP decreased to RM87.5 million from RM92.6 million last year due to lower GP margin of 4.7% compared with 5.1% last year because of the competitive market.

Mainly due to lower GP, the PBT decreased by 11.7% to RM35.6 million from RM40.4 million last year.

Year-to-date Segmental Result

The performance of the three business segments for 12 months period ended 31 December 2017 as compared to previous year-to-date were as below:

  1. ICT Distribution

    Revenue increased by 2.0% with higher sales mainly from Mobility and Drones. With higher sales and GP, the PBT increased by 7.5% to RM22.4 million compared with last year's corresponding period of RM20.9 million.

  2. Enterprise Systems

    Revenue increased by 1.4% mainly due to higher sales from workstation, storage and software. However, with lower GP margin due to the product mix and intense competition, PBT decreased by 34.1% to RM10.3 million compared with last year corresponding period of RM15.6 million.

  3. ICT Services

    Revenue decreased by RM1.6 million from lower revenue of Enterprise Systems. With lower sales and GP, the PBT decreased to RM0.7 million compared with last year corresponding period of RM1.4 million.

Prospects

With Malaysia’s forecasted GDP growth rate for 2018 ranging from 5.0% to 5.5% and the strengthen Ringgit against United States Dollar, we are optimistic on the outlook for ICT spending this year.

International Data Corporation (IDC) has forecasted a growth rate of 4.6% for 2018 for ICT spending on our range of products, mainly from Enterprise software, infrastructure and smartphones.

Although the outlook is more positive for 2018, both consumer and corporate spending have remained weak in Q1 while many public sector projects are still pending. The market conditions are still challenging for Q1 2018 but we expect the business to improve from Q2 onwards.