Time Engineering hopeful of turnaround this year

by **Cals** Wed 14 May 2014, 17:34

Business & Markets 2014

Written by Shalini Kumar of theedgemalaysia.com

Wednesday, 14 May 2014 09:52

KUALA LUMPUR: Time Engineering Bhd (TEB) is hopeful of making a turnaround this year after narrowing its net losses in the previous financial year, according to TEB executive director Patrick Wong.

He told reporters on Monday after the group annual general meeting that the losses were due to some one-off expenses, such as writing off plant and equipment as well as legal fees.

“There is no more depreciation or amortisation this year, so the costs will continue to come down while we focus on trade facilitation.

“We [Censof Holdings Bhd] only came on board four months ago and I think the first thing that we did was to make sure that we can control the costs and also improve revenue, but we are effectively looking to improve results this financial year,” Wong said.

In December, TEB incurred an impairment loss of RM9.8 million on its investment in the Integrated Enterprise Centre at Cyberjaya. Additionally, in November last year, Censof emerged as the largest institutional investor in TEB after acquiring a 45.03% stake from Khazanah Nasional Bhd for RM69.82 million.

For the financial year ended Dec 31 2013 (FY13), TEB posted a narrower net loss of RM5.97 million, compared with a net loss of RM7.77 million in FY12. Revenue decreased to RM85.8 million in FY13 from RM144.59 million in FY12.

TEB’s cash and cash equivalents as at end-FY13 stood at RM64.4 million.

Wong said the group’s earnings before interest, tax, depreciation and amortisation (Ebitda), however, had doubled due to “efficiency in operations and cost-cutting exercises”.

One of the contributors to TEB’s turnaround story this year will be the renewal of Dagang Net Technologies Sdn Bhd’s national single window (NSW) contract for trade facilitation by the government. Dagang Net is a 71.25%-owned subsidiary of TEB.

The NSW facilitates electronic customs-related transactions and duty payments, and electronic document transfer between members of the trading community.

TEB executive deputy chairman Datuk Samsul Husin said as the contract had been extended until September 2016, the “certainty of revenue” would be there. Currently, between 80% and 85% of TEB’s recurring revenue is contributed by Dagang Net.

“We see abundant opportunities in e-commerce services provision for the trade facilitation sector. While the NSW services are addressing the customs-related services segment, there are a lot more services we can offer,” he said.

Looking ahead, TEB will look at expanding its services regionally by leveraging on Dagang Net’s Pan Asian Alliance network, which includes countries such as Singapore, Thailand and the Philippines.

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(From left) Samsul, Time Engineering Bhd chairman Tan Sri Abd Rahman Mamat and Wong at the AGM in Sime Darby Convention Centre, Kuala Lumpur on Monday.

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“The decision to make further inroads into providing e-commerce services for trade facilitation in the local and regional markets is in line with the government’s aspirations in venturing into e-commerce-based business,” said Samsul.

The group is setting aside up to RM8 million for investment in research and development and the advancement of technology this year.

Meanwhile, shareholders approved a change of name for the group to Dagang NeXchange Bhd.

Samsul said the new name would be more reflective of the group’s renewed focus on providing e-commerce services for trade facilitation in local and regional markets.

This article first appeared in The Edge Financial Daily, on May 14, 2014.[/color][/size]