Quarterly Report For The Financial Period Ended 30 June 2024

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2024

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE QUARTER AND SIX MONTHS ENDED 30 JUNE 2024

Review of performance

Q2 FY2024 compared with Q2 FY2023

For Q2 FY2024, the revenue increased by 2.6% to RM624.4 million from RM608.8 million last year attributed to some recovery in consumer products despite fewer project deals from Enterprise Systems. Accordingly, gross profit increased by 5.1% to RM37.5 million from RM35.7 million last year, driven by higher gross profit margin of 6.0% compared to 5.9% last year.

Profit before tax (PBT) decreased by 2.7% from RM20.7 million to RM20.2 million after accounting for higher operating expenses by 7.4% and lower total fair value gain by RM1.7 million.

Quarterly Segmental Result

The performance of the three business segments for Q2 FY2024 compared with Q2 FY2023 were as follows:

1. ICT Distribution

   Revenue increased by 30.4% across all major products. However, with higher operating expenses, PBT decreased by 30.1% to RM3.0 million compared with RM4.2 million last year.

2. Enterprise Systems

   Revenue decreased by 14.8% across all major products. With lower sales, PBT decreased by 13.2% to RM11.0 million compared with RM12.7 million last year.

3. ICT Services

   Revenue increased by RM4.3 million from cloud services. With higher sales, PBT increased by 60.1% to RM4.6 million compared to RM2.8 million last year.

Prospects

Malaysia's economic growth in the second quarter exceeded expectations, driven by widespread gains across manufacturing and consumer spending. This suggests that the recovery seen at the beginning of 2024 is gaining traction.

Consumer spending remains robust, with steady demand for consumer devices. We anticipate that the introduction of the new Artificial Intelligence (AI) chipset with Microsoft Co-pilot will continue to fuel notebook demand in the second half of 2024.

The increasing investment and demand for datacentres are expected to benefit Malaysia's economy and our enterprise business. Over the past few weeks, there has been a notable rise in inquiries for infrastructure equipment with AI capabilities for datacentres.

Our cloud services and subscription base have seen consistent growth in recent quarters. We are excited about the upcoming launch of the hyper-scalers’ datacentres in the coming months, which we believe will further accelerate cloud adoption in Malaysia.

While the public sector remains a challenge due to several large projects being delayed, we are hopeful that these projects will materialise in the second half of 2024.

With the growth potential from the consumer, enterprise and services segments of our business, we are optimistic on Q3 and the balance of 2024.