SINGAPORE (Dec 6): Ace Achieve Infocom reported earnings of RMB4.5 million ($0.9 million) for FY18, down 75% from its FY17 earnings of RMB17.9 million due to lower revenue and margins.
Revenue for the full year fell 33.2% to RMB184.8 million from RMB276.5 million previously on the back of a slowdown in the 4G business investment environment coupled with market competition.
According to the group, this resulted in “razor thin” profit margins of 3.2% in the ICT system integration segment as compared to 5.5% in FY17.
Revenue from this segment as well as the business support solutions segment fell over FY18, offset in part by a higher revenue from maintenance & servicing.
In line with the lower topline, selling and distribution expenses fell by 20.3% to RMB6.4 million due to lower sales staff salaries as a result of lower number of sales.
Administrative expenses decreased 17.6% to RMB14.4 million in the absence of professional fees incurred for bank borrowings in FY17.
Finance expenses fell 27.2% to RMB9.2 million from RMB12.7 million previously, due to lower bank interest expenses on the lower level of bank borrowings over the financial year.
As at end-April, cash and cash equivalents stood at RMB 5.8 million compared to RMB 3.9 million a year ago.
In view of a challenging business environment, Ace Achieve says it will strive to keep a tight rein over its operating costs and cashflow management as it continues to align its business structure and foster new business growth.
The group adds that it is also considering acquiring a strategic interest in online trading and payment solutions company, as part of its plans to strategically diversify its business into a growth market with potentially high returns.
Shares in Ace Achieve last closed at 0.8 cent before the group called for a trading suspension on Nov 23, ahead of the release of its FY18 results on Wednesday as the company, then, was “unable to reasonably assess its financial position and inform the market accordingly”.
