Financial Information

Quarterly Report For The Financial Period Ended 30 September 2018

Financials Archive

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

ECS ICT Financial Position
 

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

ECS ICT Comprehensive Income
 

Review of performance

ECS ICT Financial Position
 

Q3 2018 compared with Q3 2017

Revenue in Q3 2018 was lower by 1.0% due to slower market conditions and uncertainties during the change of new government and transitional period of replacing Goods & Services Tax (GST) with Sales & Service Tax (SST). The Group recorded lower revenue of RM436.2 million compared with RM440.8 million last year due to lower revenue from ICT Distribution segment. However, with higher gross profit margin of 5.5% from the product mix compared with 4.8% last year, the gross profit (GP) increased by 14.4% to RM24.1 million from RM21.1 million last year.

With higher GP, the profit before tax (PBT) increased by 41.7% to RM10.2 million compared with RM7.2 million last year.

Quarterly Segmental Result

The performance of the three business segments for Q3 FY2018 compared with Q3 FY2017 were as follows:

  1. ICT Distribution

    Revenue decreased by 9.5% with lower sales mainly from Notebook and mobility products namely tablets and smartphones. However, with higher GP margin, the PBT increased by 33.0% to RM6.7 million compared with RM5.1 million last year.

  2. Enterprise Systems

    Revenue increased by 27.7% with higher sales mainly from servers, storage and software. With higher sales and better GP margin, the PBT increased by 40.7% to RM2.9 million compared with RM2.1 million last year.

  3. ICT Services

    Revenue increased by RM1.2 million. However, with lower GP margin, the PBT decreased to RM125,000 compared with RM168,000 last year.

9 months ended 30 September 2018 compared with 30 September 2017

The Group's revenue for 9 months ended 30 September 2018 was affected by slower market sentiments due to 14th General Election, change of government and uncertainty of replacement of GST with SST. The Group recorded revenue of RM1,186.2 million, a decrease of 11.5% compared with RM1,341.1 million last year due to lower revenue from ICT Distribution segment.

However, with higher GP margin of 5.2% compared with 4.6% last year due to higher contribution from Enterprise Systems segment and share of profit of joint venture of RM502,000 compared with RM26,000 last year, the PBT increased by 6.4% to RM21.8 million compared with RM20.5 million last year.

Year-to-date Segmental Result

The performance of the three business segments for 9 months period ended 30 September 2018 as compared to previous year-to-date were as below:

  1. ICT Distribution

    Revenue decreased by 20.7% with lower sales across major products in ICT Distribution Segment. With lower sales and GP, the PBT decreased by 15.1% to RM10.9 million compared with RM12.9 million last year.

  2. Enterprise Systems

    Revenue increased by 23.9% with higher sales across all products in Enterprise Systems. With higher sales and GP, PBT increased by 53.9% to RM8.9 million compared with RM5.8 million last year.

  3. ICT Services

    Revenue increased by RM3.7 million mainly due to higher revenue of Enterprise Systems. With higher sales and GP, the PBT increased to RM505,000 compared with RM420,000 last year.

Prospects

The economic uncertainties across the region as well as Malaysia have dampened the overall market sentiment. The reintroduction of the Sales and Services Tax in September 2018 has also impacted many ICT products and services.

The consumer spending remains weak and we foresee a drop in demand on consumer products for this Q4 2018. There are not many public sector and Government Linked Companies projects. We are putting in extra effort in building up our commercial enterprise business to cover the shortfall of the above business segments.

The business outlook for Q4 2018 remains challenging but we strive to maintain the momentum from our Q3 2018 performance.