Scicom posts profit jump (The Star - 2016)

08 Nov 2016 (Tue)

Company chalks up 16% higher Q1 revenue

PETALING JAYA: Scicom (MSC) Bhd posted a 23.71% jump in net profit to RM12mil for its first quarter ended Sept 30 compared to the same quarter a year ago mainly due to an increase in billings for outsourcing projects in line with positive industry projections.

Revenue for the quarter rose 16.29% to RM52.1mil.

The company also announced an interim dividend of two sen per share in respect of the current financial year.

Going forward, Scicom will continue to focus on the business of e-governments or digital governments’ process outsourcing business in emerging markets such as Sri Lanka, Nepal, Cambodia, Laos and Myanmar, which the company has embarked on since two to three years ago.

Group executive director and chief executive officer Datuk Leo Ariyanayakam said the company would be the largest business process outsourcing (BPO) provider in Sri Lanka.

Scicom was recently named as the call centre provider for SriLankan Airlines, according to news reports.

In the previous financial year ended June 30, 0.7% of the company’s revenue came from Sri Lanka, while the biggest contributors of revenue by country were Malaysia (55.4%) and the Philippines (32.1%).

“We see emerging markets as an opportunity,” Ariyanayakam told reporters following the company’s AGM.

Elaborating on the company’s interest in emerging markets, Ariyanayakam said these markets provided opportunities for the company to become a prominent BPO player in the region.

“We already have the track record in our capabilities based on what we have done in Malaysia.

“Most multinational competitors are quite apprehensive about going into emerging markets, but we think otherwise. There are more opportunities in these markets, as typically, their budget is not that big and fits into our cost-competitive model where we can do a lot more for them in terms of value addition,” he said.

PublicInvest Research expects Scicom, Malaysia’s largest outsourcing company, to benefit from the growing global BPO market.

According to its report in June, various industry forecasts expect the market to grow by 6%to 9% over 2013 to 2020, with a projected market size of US$220bil by 2020.

Malaysia’s ranking as a major outsourcing destination has improved from 32nd in 2007 to 18th in 2014.

PublicInvest Research said Scicom should benefit from this global trend.

The company has chalked up a five-year earnings compounded annual growth rate of 33% and has been profitable since its inception in 1997.

By Sharidan M. Ali / | November 8, 2016