Boosted by higher sales in Enterprise Systems segment

Kuala Lumpur, Malaysia, 21 February 2012 – Malaysia’s leading ICT distributor ECS ICT Berhad (ECS, 佳杰科技; Bloomberg: ECS MK; Reuters: ECSI.KL) posted record group net profit of RM10.5 million in the fourth quarter of the financial year ended 31 December 2011 (4Q11), an increase of 25.4% compared to RM8.3 million previously. 

The rise was on the back of higher group revenue for the quarter, which rose 8.3% year-on-year (y-o-y) to RM341.8 million from RM315.5 million. Both net profit and revenue for the quarter were the highest recorded since the Group’s listing in April 2010. 

The better performance was attributed to higher sales from the Enterprise Systems segment, boosted by better sales in network and communication products, servers and software. The Group’s lower interest also enhanced profitability. 

“What makes ECS’ record results even more impressive is the fact that they were achieved despite changing consumer trends of moving away from our traditional market of notebooks.

While ICT Distribution segment remains an important business for ECS, our Enterprise Systems segment has now become a major contributor to the Group’s bottomline.

We are upbeat that our Enterprise Systems segment will continue to be the next growth catalyst to propel the future profitability of the Group, as we continue to expand the value-added services and products in this segment.”

Mr. Foo Sen Chin (胡善正)
Managing Director, ECS ICT Berhad

The strong 4Q11 results effectively helped ECS to end the year on a positive note and better its previous year’s results. 

For the financial year ended 31 December 2011 (FY2011), ECS achieved 4.2% higher in group net profit, at RM30.1 million versus RM28.9 million previously. Group revenue was sustained at RM1,250.7 million against RM1,271.5 million previously. 

In FY2011, the Group’s Enterprise Systems segment saw its revenue growing 8.6% y-o-y to RM439.4 million, constituting 35.1% of group revenue. The segment’s profit before tax contributed even higher to the Group, at RM18.6 million or 45.4% of group profit before tax, due to higher margin products. 

At the same time, the ICT Distribution segment – the Group’s largest revenue generator – contributed RM797.5 million or 63.8% of group revenue, and RM20.4 million or 49.8% of group profit before tax. This was lower than FY2010’s revenue of RM855.3 million and profit before tax of RM24.3 million respectively. The decline was due to slower sales in PCs and notebooks. 

On Group basis, earnings per share stood at 25.1 sen in FY2011 compared with 24.1 sen previously. 

In view of the positive results, ECS has recommended the first and final tax-exempt dividend of 8.0 sen per share in respect of FY2011, for shareholders’ approval. The dividend payout represents RM9.6 million or 32% of net profit, which is above ECS’ dividend policy of paying 30% of net profit to shareholders. 

Financial Summary (Unaudited Consolidated Results)
RM’000	4Q11 31.12.11	4Q10 31.12.10	Change (%)	FY2011 31.12.11	FY2010 31.12.10	Change (%)
Revenue	341,770	315,467	8.3	1,250,687	1,271,512	-1.6
Pre-tax Profit	14,035	11,166	25.7	40,934	39,367	4.0
Net profit to shareholders	10,460	8,342	25.4	30,143	28,927	4.2
Basic EPS (sen) *	8.7	7.0	25.4	25.1	24.1	4.2
*Based on 120 million shares of RM0.50 par value each

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