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Quarterly Report For The Financial Period Ended 30 June 2017

Financials Archive

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Unaudited Condensed Consolidated Income Statements

Unaudited Condensed Consolidated Statements Of Financial Position

Review Of Performance

Overall performance

For the current 6-month period ended 30 June 2017 ("6M2017"), the Group recorded a lower revenue of RM117.6 million compared to a revenue of RM124.0 million for the corresponding period last year ("6M2016"). The revenue of Property Development division showed a decrease of RM11.2 million for 6M 2017 compared to 6M 2016 off set by increase in revenue for Information & Communications Technology ("ICT"), Travel & Tours and Hotels & Resorts divisions by RM1.9 million, RM1.7 million and RM1.2 million respectively. The Group recorded a higher loss before tax of RM1.7 million for 6M 2017 as compared to a loss before tax of RM0.1 million for 6M 2016 mainly due to the flow down effect of lower revenue coupled with higher finance cost and lower results of the associated companies but mitigated by higher other operating income and lower operating expenses.

Investment Holding

The division recorded a higher loss before tax of RM4.4 million for 6M 2017compared to a loss before tax of RM3.3 million for 6M 2016. This was mainly attributable to the lower results of the associated companies

Hotels & Resorts

The Hotels & Resorts division registered a higher revenue for 6M 2017 of RM29.6 million compared to RM28.4 million for 6M 2016 and a higher profit before tax of RM3.2 million in 6M 2017 compared to RM0.2 million for 6M 2016. For the period under review, overall, the Hotels & Resorts division achieved a higher average occupancy rate and average room rate for 6M 2017 compared to 6M 2016.

Information & Communications Technology

The division recorded a flat revenue, in Singapore dollars (S$), for the 6M 2017 compared to the revenue in 6M 2016 with higher system sale contract revenue recorded by GlobeOSS business unit ("BU") and higher revenue share contract revenue recorded by Unifiedcomms BU, off set by lower system sale contract revenue recorded by Unifiedcomms BU. However, upon translation of the revenue in S$ to RM, the revenue from ICT division for the period under review of RM29.4 million was higher compared to the revenue in 6M 2016 of RM27.5 million, an increase of RM1.9 million, attributable mainly to the higher foreign currency exchange rate for 6M 2017 compared to 6M 2016.

The division recorded a lower profit before tax of RM3.9 million for 6M 2017 compared to RM5.6 million for 6M 2016 mainly attributable to an overall reduction in its gross profit margin primarily due to higher proportionate contribution of system sale contract revenue by GlobeOSS BU which generally delivers lower gross profit margin coupled with lower gross profit margin on certain managed service contracts due to higher third-party costs and lower revenue contribution of certain mature, higher-margin managed service contracts.

Property Development

The Property Development division registered a lower revenue for 6M 2017 of RM0.8 million compared to RM12.0 million for 6M 2016 mainly due to delay in Federal Park Phase 2 launching. With the lower revenue, this division made a profit before tax of RM0.1 million for 6M 2017 compared to a profit before tax of RM2.0 million for 6M 2016.

Travel & Tours

For the current period under review, our Travel & Tours division achieved a higher revenue of RM51.1 million as compared to a revenue of RM49.5 million for the corresponding period last year, an increase of RM1.7 million mainly from ticketing and outbound travel sales off set by the lower revenue in the inbound tours division. Despite the higher revenue, this division recorded a lower profit before tax of RM0.7 million for 6M 2017 compared to RM2.5 million for 6M 2016 mainly due to lower gross profit margin and a higher loss from the inbound tours division due to the flow down effect of a reduction in revenue.


The Others division registered a similar revenue of RM6.6 million for both 6M 2017 and 6M 2016. This division recorded a lower loss before tax of RM5.1 million for 6M 2017 as compared to a loss of RM7.4 million for 6M 2016 mainly due to lower operating expenses for 6M 2017 and that the operating expenses in 6M 2016 included a loss on disposal of the loss making manufacturing subsidiary of RM1.6 million.


Our Board expects the remaining period of 2017 to be challenging for the Group with expected volatility in the global economy and increasing inflationary pressures in our domestic market.

With the expected challenging environment, our Board is cautiously optimistic on the implementation of our business plans. Our Group will continue its focus on measures to improve operational efficiencies and productivity coupled with cost reduction efforts. To deliver substainable growth in revenues and profits of our major divisions, the Group will pursueits strategic plans which a real ready in place to grow our established core businesses and explore attractive opportunities to expand operations. For the non-core loss-making businesses, we will focus on turn a round restructuring plans failing which the business unit will cease operations and/or be divested.

Although the Hotels & Resorts division views the business outlook for 2017 to be challenging, the division is cautiously optimistic taking into consideration our focus on certain encouraging trends in the industry and the anticipated increased online sales from direct online bookings on our recently launched upgraded website. The division will also focus on developing business from the Asia region by working with tour operators, local corporate businesses, and be innovative insecuring more residential meetings. Our focus to grow the hotels and resorts businesses regionally will partly mitigate the anticipated weak local meetings, incentives, conferences and exhibitions (MICE)market for 2017 and the recent political events in Qatar which have an adverse impact on our hotel performance in Doha, Qatar.

The Information & Communications Technology ("ICT") division expects the remainder of financial year 2017 to be challenging but remain optimistic about growth prospect. Although 2016 proved to be another unexpectedly good year for business generated from system sale contracts, the division does not expect this to be a trend that can be readily extended into 2017. Significant uncertainty and hence lumpiness is still to be expected in the contribution of system sale contracts to the performance of both Unified comms and GlobeOSS businesses. This has been made apparent in the current quarter's result where system sale contracts revenue for both businesses have shown a sizeable decline against the prior quarter this year and the corresponding quarter last year. The division will need to continue to strengthen its managed service contract portfolio to deliver steady and sustainable growth.

The ICT division will continue to work on improving execution in respect of strategies and tactics to grow its managed service contract revenues and profit and further build on the improvement achieved for this year. The growing interest and opportunity in internet-driven application services, new media and applications delivered on an advertisement-supported or advertisement-funded model continues to be recognised by its management. The ICT division's strategic and venture investment plans in the year a head will continue to focus primarily on these growth businesses in the SouthEast Asia and South Asia regions and will complement the growth initiatives of existing businesses.

Our Property Development division expects to face continued challenges in the remaining period of 2017 due to the softening of the property market in Kuching and the cooling measures on the property market. The division will focus on developing and launching Phase 2 of its Federal Park project, to drive the earnings of the division for 2017.

Our travel and tours division is cautiously optimistic of their performance for the remaining period of 2017 as they continue to remain focused on building its corporate client base for the ticketing business and indeveloping and adapting its products to sustain growth in the leisure and corporate group markets for both inbound and outbound travel and tours.

The Others division will remain focused on its key strategies to drive the revenue growth plan although the continued challenges in 2017 may cause significant uncertainty in the achievement of such revenue growth plan this year. In addition, the division will focus on improving the execution process and implementing cost saving measures to address the challenge of rising cost pressure. Further restructuring plans to turn around non-performing businesses (which may include ceasation of such business and/or divestmentif the restructuring is not successful within a targeted period) will be implemented to improve the performance of this division.