Vivocom optimistic of consistent project wins

KUCHING: Vivocom International Holdings Bhd (Vivocom) is optimistic that its consistent project wins, which saw its order book grow at a healthy pace, will contribute positively to the group’s revenue in the next few years.

In its 2017 Annual Report, Vivocom pointed out that the Malaysian economy is projected to continue its strong growth momentum with real gross domestic product expanding between five and 5.5 per cent in 2018, with growth expected to mainly be driven by resilient domestic demand amid favourable external sector.

It also believed that the positive growth momentum would continue from better global growth on to domestic economic activity.

“Despite the challenges faced in the financial year 2017 (FY17), the group has been awarded numerous projects for the aluminium and construction segment which have built up a strong order book for the group.

“The board of directors and management are optimistic that the consistent project wins will contribute positively to the group revenue in the next few years,” it said.

Meanwhile, on the group’s performance, Vivocom noted that the group’s revenue is derived from construction, aluminium, and telecommunication segments.

“For FY17, the group recorded profit before tax of RM20.89 million on the back of RM183.13 million in revenue, as compared to profit before tax RM81.31 million on the back on RM365.90 million in revenue in FY16, a drop of 74.3 per cent.

“The significant drop was due to slower progress billing in the construction segment and lower work orders received and the delay in award and implementation in telecommunication segment,” it added.

Aside from that, it said, its construction segment had recorded RM105.14 million revenue in FY17 as compared to RM269.82 million in FY16.

“However, the management believe the work progress and billing will resume its pace in FY18. In addition, the construction segment had secured sizeable projects during FY17 which will continue generating revenue for the group in the next few years.

“The aluminium segment performed well in FY17 with an increase revenue of RM10.19 million from FY16 on top of more project wins in FY17 which will contribute positively to the group’s revenue.

“Telecommunication segment reported RM22.32 million revenue for FY17, a drop of RM28.29 million from FY16,” it explained.

For the the financial year ending December 31, 2017, Vivocom provided for impairment amounting to RM6.38 million on the consolidated goodwill allocated to its investment in Instacom Engineering Sdn Bhd.

“The impairment was provided as the cash generating units in Instacom Engineering were unable to justify its full carrying value due to uncertainties in the outlook for the telco engineering services segment for the next five years,” it added.