DGB Asia to expand overseas contribution to 50%

PETALING JAYA: DGB Asia Bhd, formerly known as DSC Solutions Bhd, is looking to ramp up its operations in Vietnam and Thailand, as part of its plan to increase overseas revenue contribution to 50% within a year from the current 30%.
The group is also confident of turning around its fortunes in the financial year ending Sept 30, 2015. For the first quarter ended Dec 31, 2014, DGB returned to the black by registering RM139,000 in net profit compared with a net loss of RM538,000 in the previous corresponding period.
The group has been incurring losses over the past few years, with a net loss of RM5.16 million for the financial year ended Sept 30, 2014.
In a bid to revive its financial performance, DGB Asia managing director Datuk Pang Chow Huat said the group will open its offices in Vietnam and Thailand to cater to the growing demand in the two markets.
"We believe we can get multi-million profits from there (Vietnam and Thailand), we see the Vietnam market growing better and in development, they need our support, so this is a good opportunity for DGB to invest there," he said, adding that the group is also on the lookout for expansion opportunities in Indonesia and Vietnam.
DGB's main overseas markets are Singapore, Vietnam and Thailand, which collectively contribute 30% to its total top line.
Segment-wise, the software and engineering business is the main contributor to the group's revenue (60%), followed by radio frequency identification (RFID) and other businesses.
"The market is growing strongly and has no effect on our current business, even pricing we haven't seen any slowdown," he told Sunbiz through a phone interview, adding that its software and engineering services remain robust.
He said the group has no intention of diversifying its business at the moment, given the promising outlook its current businesses offer.
DGB recently received shareholders' approval for a rights issue exercise to raise up to RM37 million on 11 sen per rights share. This is on the basis of two rights shares for every one existing DGB share held, with an issuance of up to 336.16 million shares.
Shareholders are also entitled to three warrants for every four rights shares subscribed. The ex-date of the rights issue will be on March 31.
Of the proceeds raised, RM29.57 million will be utilised for working capital while RM5.5 million for capital expenditure (capex).
Pang said the group is considering dividend payout for the current financial year on the back of improved financials, but the payout quantum is dependent on earnings it makes.
DGB's share price was down 0.5 sen to 11.5 sen yesterday, on some 4.05 million shares done.