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Categories
| SMR Tech expects to stay in the black for FY09 |
| Business & Market 2009 | |||
| Written by Joy Lee | |||
| Tuesday, 02 June 2009 10:34 | |||
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Its chairman and chief executive officer Dr Palaniappan Ramanathan Chettiar said strategies were in place for it to remain in the black for the rest of the year. “The first quarter was positive. We anticipate that the next three quarters will be far more positive,” he said after the company’s AGM yesterday. SMR’s net profit fell 98% to RM7,000 in 1QFY09 from RM402,000 a year earlier mainly due to lower sales of software solutions. Revenue had dropped 47% to RM2.59 million from RM4.89 million previously. For FY08, the group posted a net loss of RM7.22 million versus a net profit of RM6.21 million in FY07, while revenue dipped 40%  to RM11.36 million from RM18.98 million. Although the rest of the year remained challenging, Palaniappan said the outlook for the software services provider still looked positive. “This is because we would only pursue profitable businesses. We are pulling out of markets which are losing money and would focus more on large customers,” he said. Last year, SMR Tech terminated its co-founder agreement with US-based Smartha Inc, in which it had held a 23.4% stake, and closed its business in Brunei. “We were aggressive in our expansion plans but things did not go as we had anticipated and in the current economic climate, investment in software takes a backseat. “We also abandoned plans to go into Vietnam and we chose to focus on the Middle East instead. We wanted to bet on the best markets with our available resources,” he said. Palaniappan said SMR Tech, which specialises in human resource services, would eventually venture back to labour-intensive countries such as Cambodia and Vietnam. However, 2009 would be a year of consolidation as “it would not want to undertake experimental ventures for now”. Palaniappan added that the implementation of the government’s RM67 billion stimulus package would enable it to grow its business locally as there was a huge impetus for training and development. “Our overseas revenue contribution at the moment is about 60%. We want to maintain a balance and bring that to 50%. There is huge potential in the Malaysian market with the stimulus package,” he said. This article appeared in The Edge Financial Daily, June 2, 2009.
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