Scicom eyes emerging markets (New Strait Times - 2016)

08 Nov 2016 (Tue)

KUALA LUMPUR: Scicom (MSC) Bhd is looking to further solidify its market position in emerging countries, especially towards digitising the government services.

Analysts are upbeat on Scicom’s capability to tap bigger market share of the global business process outsourcing (BPO) segment that is expected to grow between six and nine per cent from 2013 with a projected market size of US$220 billion (RM927.7 billion) by 2020.

Chief executive officer and group executive director Datuk Leo Ariyanayakam said governments in emerging countries were in the early days of their digital government journey and were now focused on building technology platforms in order to deliver convenient services to citizens and businesses.

“We believe that the federal, state and local governments will be an attractive market for digital technologies as governments move to offer digitised services to their citizenry in a world that is being rapidly connected.

“The focus will be on improving our dominant position in the Asean region and to grow our market in Sri Lanka. We target to be the largest BPO service provider in Sri Lanka by March next year,” he said after the company’s annual general meeting, here, yesterday.

Currently, Malaysia is the largest revenue contributor (55.4 per cent) followed by the Philippines (32.1 per cent). Sri Lanka only contributed 0.7 per cent of revenue.

Its outsourcing services contributed the largest chunk to the company’s revenue at RM195.8 million, higher by 98 times than the RM2 million revenue in education services as at its full year ended June 30.

Analysts said Scicom’s business model would provide consistent long-term revenue streams to the company amid a challenging global economic environment.

Meanwhile, Scicom registered a net profit of RM12 million in the first quarter ended September 30, rising 23.6 per cent from RM9.7 million in the same period a year ago, mainly due to rise in billings for outsourcing projects.

Revenue jumped 16.3 per cent to RM52.1 million in the quarter, from RM44.8 million a year ago.

AffinHwang Investment Bank has a “buy” recommendation on Scicom with an increased target price of RM2.74, from RM2.62 previously.

Scicom closed one sen higher at RM2.13 yesterday from Friday’s close.

By Amir Hisyam Rasid / New Strait Times  | November 8, 2016