OCK’s towering plan to boost recurring income

SHAH ALAM: OCK Group Bhd is looking to boost its recurring income in the next three years by acquiring and building new greenfield telecommunications infrastructure, inclusive of towers and sites, to lease to telecom operators in the Asean region.
The telecommunications network services provider is involved in network planning, design and optimisation, network deployment, network operations and maintenance for the local mobile operators such as Maxis, Digi and Celcom.
Speaking to reporters after its EGM yesterday, managing director Ooi Chin Khoon said the group hopes to more than double contributions from recurring income to overall revenue to 40%-50% within three years, from less than 20% at present.
At the EGM, its shareholders approved OCK’s plan to undertake a renounceable rights issue of up to 290.5 million new shares on the basis of one rights share for every two existing shares held. The exercise is expected to raise gross proceeds of up to RM145.24 million based on the indicative issue price of 50 sen per rights share.
“Our intention for this right issue is to be a tower owner now. We are looking at the Asean region, especially Malaysia, Myanmar, Laos, Cambodia, Vietnam, the Philippines, Thailand and Indonesia, to start accumulating the tower portfolio.
“We see that owning a tower portfolio is very beneficial and this will create a lot of value to OCK,” Ooi said.
OCK now owns more than 100 telco sites in Malaysia and is targeting to own more than 300 telco sites by early next year.
Ooi said the company is also looking to capture a slice of the telco site maintenance market that offers recurring revenue. He said the group currently maintains over 4,000 telco sites in Malaysia, and another 16,000 telco sites in Indonesia.
The company’s revenue comes mainly from its telco network services division (70%) and green energy and power solutions division (29%).
For the second quarter ended June 30, 2015, OCK saw its net profit increase 70% to RM5.13 million, from RM3.02 million in the previous year’s corresponding quarter.
Revenue jumped 62% to RM70.27 million, compared with RM43.43 million previously, mainly due to higher revenue contribution from its businesses in Indonesia, Cambodia, Myanmar and China, as well as from maintenance works and distribution of telecommunication equipment in Malaysia.
For the first six months, OCK’s net profit was up 36% to RM8.2 million, from RM6.04 million a year ago, while its revenue rose 58% to RM126.43 million, against RM80.03 million last year.
“For the past few years, we have a quite steady growth. So this year we expect that we will continue to grow as before,” Ooi said.
The group has an order book of RM400 million.