Healthy pipeline of outsourcing projects anticipated for Scicom

KUALA LUMPUR: Analysts anticipate a healthy pipeline of outsourcing projects for Scicom (MSC) Bhd (Scicom).

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), this will provide visibility for Scicom’s full year sales.

Scicom is also actively pursuing contracts worth RM105 million through tender for the business process outsourcing (BPO) business, it said.

“On the other hand, Scicom is taking proactive measures to control its operation cost, which we expect to mitigate the absence of zero-tax in the coming quarters,” the research arm said in a research note yesterday..

Meanwhile, MIDF Research saw that Scicom’s tax rate is likely to normalise starting the second quarter of 2018 (2Q18) as the tax holiday has ended in early November 2017.

The research arm expected taxes to normalise to 24 per cent in the coming quarters compared to almost zero in the quarter under review.

This will impact Scicom’s profit after tax (PAT) margin but the research arm did not expect huge changes for the group’s profit before tax (PBT) margin.

“We have already factored in higher taxes in our full year forecast,” it said.

On forecasts, MIDF Research made no changes to its earnings estimates as the latest results came within expectation.

Scicom’s 1Q of financial year 2018 (1QFY18) earnings were within MIDF Research’s expectation, making up 27 per cent of its and 25 per cent of consensus’ estimates.

Scicom’s revenue of RM45.8 million was also in-line with the research arm’s full year forecast, coming in at 22 per cent.

“An interim dividend of two sen per share was declared, which is also in-line with our full year expectation of nine sen,” it said. — Bernama