CWorks looks to return to the black

KUALA LUMPUR: ACE Market technology company CWorks Systems Bhd aims to return to the black this financial year ending Dec 31, 2016, on the back of a business relationship with a property developer and free zone operator, its chairman said.
CWorks chairman Datuk Elias Abdullah Ng said it stands a good chance to secure further IT contracts from the Orion group of companies controlled by Michael Ong Seng Guan.
“Later on, when we’re confident of developing all these software for expansion, there is a lot of business that CWorks can do for Orion,” Elias said at a press conference on its partnership with the Orion group of companies.
CWorks made a net loss of RM1 million for the third quarter ended Sept 30, 2015, compared to a net loss of RM1.3 million for the same period in 2014.
CWorks, a maintenance management software specialist, had on Feb 5, 2016 entered into an agreement with PPYC Logistic (Malaysia) Sdn Bhd, a company related to Orion, for an RM8 million contract.
“If everything works out well and (we can secure IT contracts) from their iconic projects, it will be lucrative. In 2016, we will be on the right footing going forward,” said Elias.
Michael Orion Sdn Bhd, previously known as Orion Mining Sdn Bhd, is working with the Kuantan Port Authority to build KP Orion Tower, which will cost more than RM464 million.
A check with the Companies Commission of Malaysia shows that Michael Orion is in the business of training, consultancy for workshops, exhibitions and promotions and no financial track record filed with the regulator.
Ong, the chairman of Orion, said there are plans for greater cooperation between CWorks and Orion, with CWorks concentrating on the IT segment, while it focuses on property development and free trade zone operations, hinting at a possible reverse takeover (RTO) of CWorks by Michael Orion.
Elias said the subject of an RTO requires a solid plan for the long term, while CWorks and Orion are still mostly discussing IT projects on a short-term perspective.
“If the RTO happens, it will benefit shareholders of CWorks but, right now, we cannot do it. We have to put CWorks into proper perspective first, because CWorks has been running at a loss for the last few years. With all these new IT projects coming in, we will be on the right footing. Cworks will be in the black by this year, with these new IT projects, mainly from the Orion group of companies,” Elias explained.
Interestingly, CWorks proposed a name change to Orion IXL Bhd last month. This is still pending shareholders’ approval.
Ong also said Orion is currently in talks with Starwood Hotels & Resorts, one of the leading hotel and leisure companies in the world with renowned brands such as St Regis, Westin, Le Méridien and Sheraton. He said it expects to conclude the selection of the hotel brand for KP-Orion Tower by June.
Elias said Kuantan Port Consortium and Kuantan Port Authority have agreed to relocate their headquarters to the KP Orion building.

“It will take 2½ to three years to complete and we expect a return (on investment) within six years, because it is within the free trade zone, targeting many international companies, freight forwarding, import and export businesses,” said Ong.
Orion also plans to set up a one-stop building materials hub in Asean on 100 acres of land within the free trade zone, which will involve an investment of RM250 million.
“We’ve signed a letter of intent with Binzhou Port Authority to join forces to bring in the concept of one-stop building materials hub, which will be a place to source for any building materials like bolts and nuts, to piling steel bars, tiles. This is the first in Malaysia and we will duplicate this concept to Colombo, Sri Lanka.”
Ong said Orion has engaged in discussions with three to four Malaysian listed companies, consisting of two in property development, one in manufacturing, as well as CWorks, for KP Orion Tower and its other businesses.
“Most likely we will get more involved with CWorks in times to come. At this juncture, we’re also discussing software and other horizons, such as taking CWorks to Sri Lanka,” said Ong.