EA Holdings confident of turnaround in FY17

PUTRAJAYA: ICT business solutions provider EA Holdings Bhd, which is eyeing RM60 million revenue in its current financial year ended March 31, 2017 (FY17), is confident of turning around, driven by its strong order book and tender book.

“For five consecutive quarters, we recorded losses. So, finally, in the first quarter of this year, we made a profit,” its CEO Mohammad Sobri Saad told reporters after its AGM here yesterday.

For the financial period ended March 31, 2016, the group recorded a net loss of RM29.7 million, mainly due to impairment on goodwill amounting to RM17.4 million and impairment on development cost of RM4.1 million.

Sobri said the net loss was also attributed to the cancellation of the group’s major ICT projects, as a result of dampened economic activities due to the slump in oil prices, weakening of ringgit, as well as the implementation of the Goods and Services Tax (GST).

For the 15 months period, EA Holdings’ revenue decreased 10.9% to RM35.9 million, from RM40.3 million previously, due to lack of new major projects.

To recap, the group changed its financial year-end from Dec 31, 2015 to March 31, 2016.

“Last year, I think most of the IT companies didn’t do well. Hopefully this year we can recover,” he said.

To date, Sobri said, the group is tendering for close to RM60 million worth of jobs involving mainly software solutions and ICT services in government-linked companies (GLCs), as the well as financial services sector.

“Out of that, we have closed about RM30 million of jobs. For the other RM30 million (projects), we might close them probably in another six months,” he said.

Going forward, Sobri said, the group will continue with its merger and acquisition strategy, as it plans to diversify its business to reduce its dependency on the soft ICT market and generate more revenue.

“In fact, our first quarter results this year were mostly helped by our 20%-owned associate company (Cekap Air Sdn Bhd),” he noted.

For the first quarter ended June 30, 2016 (Q1’FY17), EA Holdings recorded a net profit of RM108,000, which was aided by the share of its associate profit.

Sobri said the group is not in talks with any company at the moment.

“This is an ongoing process. We are still looking for good companies to be acquired. Since our listing, we have acquired three companies,” he added.

The group’s latest acquisition involved a 20% stake in Cekap Air last year, where the company provides mechanical and electronic engineering services to the water and waste water treatment industry.