By SHAZNI ONG / Pic By TMR
Sedania Innovator Bhd’s earnings are expected to experience a turnaround in the current financial year, following a disappointment performance last year on the back of reverse impairments and new products from its business segments.
Its group CEO Daniel Ruppert (picture) said last year’s poor performance by the group was attributed to lower revenue and non-cash loss related to the impairment of trade and finance lease receivables.
“We are quite confident that 2019 will be a lot better than 2018. We are quite confident that we can turn this around on the back of moving the causes that have drop our revenue and profit in 2018.
“And of course, our new products would be contributing quite a bit,” he told reporters after the company’s AGM in Petaling Jaya yesterday.
Listed on the ACE Market of Bursa Malaysia in June 2015, the tech firm reported a net profit of RM1.84 million in its financial year ended Dec 31, 2015 (FY15) but slipped into the red with a net loss of RM1 million in the following year (FY16).
Although it returned in FY17 with a net profit of RM1.57 million, it went into red again with a net loss of RM4.36 million in FY18.
Its revenues, meanwhile, were recorded at RM8.7 million (FY15), RM17.55 million (FY16), RM27.3 million (FY17) and RM12.34 million (FY18).
Ruppert, who has helmed Sedania since January last year, added that the financial announcement that the company made earlier for its financial performance for 2018 was “a disappointment at first sight”.
“But if we take a closer look at where this came from, then you will realise that it is actually not that bad,” he said.
Ruppert said the company was affected by the implementation of the Malaysian Financial Reporting Standards 9 (MFRS 9) regulations regarding accounts receivables.
He said about 60% to 65% of the profit drop was actually due to the new accounting rules that they had to make, while the business-related impact was around 30% attributed to slower contribution activities from two of its business segments namely greentech and Internet of Things (IoT).
On the group’s prospect, Ruppert said that he expected all of Sedania’s business segments to continue contributing, while remaining catious in its business outlook in the short term.
The firm’s business segment comprises financial technology (fintech), sharing platform, IoT solutions, green technology (greentech) solutions and big data analytics.
He said the continuous positive contribution from the fintech segment and (prospects from) its new innovations that are expected to go into the market in 2019 are encouraging, and that there is good progress in the greentech segment despite some initial delay of a project due to its extended execution time.
“Fintech and sharing platform will continue to contribute. Greentech will start to come in this year and our pipeline is very full. However, keep in mind that this pipeline or recognition of these projects would only come quite a bit later.
“Other goal drivers would be IoT because we are resuming the supply and this would be contributing as well. And we also have some exciting news of our micro-hydro segment that we are going into. This will be our first entry into renewable energy,” he said.
Meanwhile, on the recent Digi.Com Bhd and Celcom Axiata Bhd merger, he said such consolidation was expected to happen.
“We all knew that some consolidation has to happen. But further than consolidation, has to be convergence. Telecommunications companies cannot just be highway builders (providing connectivity) such as Internet infrastructure anymore. It has to go beyond that.
“And if that does not happen, they would get into a difficult position. So, a way to get up or out of that is usually by teaming up or merger. Malaysia is not the first country for this to happen. The phenomenon has happened with many countries before Malaysia,” he said.
Sedania’s shares in the ACE Market closed two sen higher or 12.9% to 17.5 sen yesterday, for a market capitalisation of RM43.5 million.