REDtone’s net profit decline 48% in Q4

PETALING JAYA: REDtone International Bhd's net profit declined 48% to RM7.9 billion in the fourth quarter ended May 31, 2014, compared with RM15.2 million a year earlier, on lower data revenue.
Its revenue also fell 15.6% to RM37.3 million from RM44.2 million in the previous corresponding period.
In a filing with Bursa Malaysia, REDtone said this is the third consecutive year of profitability for REDtone which will be seeking for a transfer to the Main Market in 2015.
The company said that if it weren't for delays in billings of some of its projects, it would have posted a stronger top and bottomline for FY14. They said these projects' earnings contributions will now be recognized in FY15.
For the financial year ended May 31, 2014, the company's net profit fell by 10% to RM22.6 million from RM25.1 million while revenue advanced slightly to 2% to RM144.8 million from RM142.0 million a year ago.
"While government projects took the lead, there was also higher data usage from corporate customers as we enhance our value-add solutions as part of the total offerings to them. Adding value is important to our business as it helps to build customers' 'stickiness' and differentiates us from the rest," REDtone CEO Lau Bik Soon said in a statement yesterday.
With better data revenue, he said its data business segment's contribution to group revenue also rose to close to 60% in FY14 compared with 50% a year ago further cementing this business pillar's increasing importance to REDtone's growth moving ahead.
"We have been taking a capex-light approach, running the business on a recurring revenue model and leveraging on our core competencies. We will continue to be guided by these practices as we move into a new phase of growth," he said.
Lau said REDtone's three key business pillars are telecommunications services, managed telco network services and managed value-added services.
He said its fourth core offering is mobile services where REDtone hopes to roll out 4G LTE services in the first quarter of 2015 to niche markets.
These four core offerings are expected to propel REDtone's growth over the next three to five years, he said, adding that REDtone's network sharing and alliance agreement (NSA) with Maxis Broadband Sdn Bhd is also expected to contribute to the group's earnings from FY15 for 10 years.