Lower revenue hits ECS ICT

PETALING JAYA: ICT products distributor ECS ICT Bhd saw its net profit in the second quarter ended June 30, 2016 (Q2FY16) fall 21.25% to RM6.3 million, from RM8 million a year ago, due to lower revenue contributions from all three business segments.
Revenue was down by 4.4% to RM400.18 million, compared with RM418.8 million in the previous corresponding quarter last year, due to softening market conditions.
In a filing with Bursa Malaysia yesterday, ECS said during the quarter, its ICT distribution segment’s revenue decreased by 1.9% with lower sales from mobility products, namely tablets and smartphones.
The company noted that its enterprise systems segment’s revenue was down by 10.9% with lower sales of servers, storage products and software, whereby its ICT services segment’s revenue decreased by RM2.9 million.
For the six months period, its net profit declined 34.3% to RM11.42 million, from RM17.39 million a year ago, while revenue shrank 11.3% to RM834.9 million, against RM941.6 million previously.
On prospects, ECS said the overall economic uncertainty would continue to dampen the market demand for ICT products in both consumer and commercial segments.
“The latest International Data Corp (IDC) report on IT spending in Malaysia for first half of 2016, shows a decline from 2015 in sales of PC, Notebooks, servers and smartphones.”
ECS said the trend is expected to continue for the rest of the year.
“We shall endeavor to maintain our market share on our existing products and to expand with more new products like wearables, mainly smartwatches and Internet of Things (IoTs) such as drones.”
“In view of the current market condition, the outlook for the second half of FY2016 is challenging,” it added.