MyEG 3Q profit jumps 39% boosted by online foreign worker permit renewal contract

by **Cals** Sat 30 May 2015, 00:57

MyEG 3Q profit jumps 39% boosted by online foreign worker permit renewal contract

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By Chen Shaua Fui / theedgemarkets.com | May 29, 2015 : 7:27 PM MYT

KUALA LUMPUR (May 29): [size=14]MyEG Services Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)'s net profit jumped 39% to RM19.07 million for the third quarter ended March 31, 2015 against RM13.74 million, mainly contributed by the online renewal of foreign worker’s permit and insurance.

MYEG (fundamental: 3; valuation: 1.1)’s 3QFY15 revenue grew 27% to RM38.97 million from RM30.63 million last year.

Earnings per share also expanded to 1.60 sen from 1.10 sen in the previous corresponding quarter.

In a filing to the Bursa Malaysia today, the e-government concession said the increase of revenue and profit for the quarter was primarily attributable to higher transaction volumes from online renewal of foreign workers’ permits and insurance; online transfer of vehicle ownership; and online renewal of motor insurance and road tax.

For the nine months, the online e-government service provider recorded a nearly 35% increase in net profit to RM45.2 million from RM33.49 million a year ago, according to the filing.

Meanwhile, its cumulative revenue stood at RM96.46 million, rose by 28% from RM74.5 million last year.

MYEG said that the increase in cumulative revenue and profit after tax is primarily attributable to higher transaction volumes from the online renewal of foreign workers’ permits and insurance.

In addition, a continuous growth in existing services related to motor vehicles owned by Malaysians, driven by its ongoing advertising and promotion campaigns to create and enhance brand awareness, it said.

The service provider came under the spotlight when the government intended to make online foreign worker permit renewal mandatory with MYEG to collect RM38 convenience fees per transaction early this year.

The government decided to open immigration counter to handle the renewal after public outcry which had initially post uncertainties to the company’s earnings. Subsequently in May, the government announced that it would absorb the RM35 convenience fee to be paid to MYEG.

Moving forward, the group expects the continued growth in volume of its existing services especially online renewal of foreign workers’ permit and online transfer of vehicle ownership to continue.

“With our concession period extended for a further five years from May 23, 2015 to May 22, 2020, we will continue to focus on rolling out services from new and existing government agencies which are relevant to Malaysians.

“At the same time, we will also expand our commercial services especially services which will leverage on the co-branded card with RHB Bank Bhd ([You must be registered and logged in to see this image.] Financial Dashboard),” it added.

“Barring any unforeseen circumstances, the directors of MYEG are of the opinion that the results for the financial year ending June 30, 2015 will continue to be satisfactory as awareness of our existing services and brand name continued to increase while MYEG continues to roll out new services,” it said.

MYEG’s share price rose four sen or 1.64% to close at RM2.48 today, giving it a market capitalisation of RM2.93 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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