ECS ICT posts lower 2Q revenue on fall in sales

  • Market uncertainty from general election sees less consumer spending, 19% revenue fall
  • Sees improvements in 4Q18 from increased corporate spending from year-end budgets


ECS ICT posts lower 2Q revenue on fall in sales


ECS ICT Bhd announced a net profit of RM4.27 million in the second quarter (2Q18), a 15% year-on-year drop from RM5.01 million in 2Q17.

The decline in net profit is tied to the 19% fall in revenue to RM358.21 million from RM443.47 million previously.

In its Bursa Malaysia announcement, the company explained that its lower sales and profits are due to reduced consumer spending following market uncertainties after the 14th General Election on May 9.

“Many public sector and GLC projects were deferred and the delays have impacted our enterprise sales on server, storage and networking products.”

The group’s ICT distribution segment recorded a 26% decline in IT hardware sales, thus effecting a decrease in profit before tax (PBT) by 46.1% to RM4.2 million, compared to RM7.8 million last year.

Although revenue increased from its enterprise segment and ICT services segment, the spike proved insufficient to compensate for the weaker performance of its ICT distribution segment.

As for ECS ICT’s first half ended June 30 (1H18), net profit fell by 12% year-on-year to RM8.66 million from RM9.83 million in 1H17, while cumulative revenue reduced by 17% to RM750.01 million from RM900.26 million.

ECS ICT is an associate company of ECS Holdings Limited, which is an ICT distributor in the Asia Pacific with a presence in China, Thailand, Malaysia, Singapore, Indonesia, the Philippines, Cambodia and Myanmar.

The MSC-Status company started in 1985 and listed on Main Market of Bursa Malaysia on April 15, 2010. The Group is a distributor for ICT products in Malaysia via ECS Astar and ECS Pericomp.

Although outlook for the second half of FY18 appears to be challenging, the group reveals, “We expect improvement in the fourth quarter with higher sales of consumer ICT products and increase in corporate spending on ICT equipment from their year-end budget.”

Shares of ECS ICT closed at RM1.01 on Aug 13, with a change of -0.01 from its previous closing.


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