Scicom hopeful of better FY20 on new contract wins

By SHAZNI ONG / Pic By TMR File

SCICOM (MSC) Bhd is eyeing a better performance in the financial year ending June 30, 2020 (FY20), after having securing several business process outsourcing (BPO) contracts.

Earlier in FY19, the technology and BPO firm won between five and 10 BPO contracts which are expected to be deployed in the current financial year, Scicom CEO Datuk Seri Leo Ariyanayakam (picture) said.

FY19 was a “challenging year” for the group as all three of its main business areas did not do well, he added.

“Some of our Chinese clients were affected by the US-China trade war. In other words, the trade war has a little bit of impact on the clients’ outlook,” Leo told reporters at the company’s AGM in Kuala Lumpur yesterday.

Despite the challenging outlook, the company has several new business projects in the pipeline.

The group’s future clients are involved in the aviation, e-commerce and hospitality segments, although Leo declined to elaborate further on the value of the contracts.

“These are three, foreign big ones (clients). What is interesting about all of this is that they are all actually foreign clients with external demands.

“Maybe early next year, we will make some announcements,” Leo said.

The company is also open to entering new markets, particularly to expand its government-tech business.

Last year, it set up operations in Mauritius, seen as a gateway to the African market, which the group is eyeing, Leo added.

Meanwhile, the group’s target of securing a contract to track foreign workers is “looking very positive”.

“We do hope to secure it in this financial year. It has not been computed into our numbers, so we do believe we will grow irrespectively. Securing this project will be a good bonus,” Leo stated.

Scicom’s net profit rose 23.9% year-on-year (YoY) to RM6.42 million in the first quarter ended Sept 30, 2019, due to higher revenue in transactional volume for major BPO clients.

Earnings per share was higher at 1.88 sen for the quarter under review compared to 1.46 sen recorded last year. Revenue for the quarter was up 24.4% YoY at RM48.09 million, the company noted in a Bursa Malaysia filing yesterday.

The group declared an interim dividend of 1.5 sen per share due payable on Dec 24, 2019, and has made significant inroads in its business development efforts for its suite of products globally, it said.

“The group expects these prospects to convert and contribute to the group’s earnings in the second half of FY20,” it said.

Scicom’s shares closed 3.85% higher at RM1.08 yesterday, valuing the company at RM383.89 million.