09 Oct REDtone optimistic about turnaround in FY18
REDtone International Bhd is optimistic about a turnaround in the current financial year after reporting losses in the previous two years, mainly on the back of growth in its telecommunications services and managed telecommunications network services (MTNS) segments.
Noting that the group has seen two consecutive profitable quarters, chief executive officer Lau Bik Soon said: “I’m positive that we should continue to keep the momentum for the quarters moving forward.”
“[This] will be driven by a combination of mainly telecommunication services and MTNS,” Lau told reporters after REDtone’s annual general meeting yesterday.
REDtone, which is a 51.67% subsidiary of Berjaya Corp Bhd, revolves around three key areas, namely telecommunications services, MTNS, and industry digital services (IDS).
The group, which suffered a net loss of RM4.89 million for the year ended April 30, 2017 (FY17), registered a net profit of RM1.1 million in the first quarter of FY18 (compared to a net loss of RM1.16 million in the same quarter of FY17) on improved gross margins and better control of operating costs.
Revenue for the first quarter, however, fell 21.36% to RM30.23 million, from RM38.45 million previously, on lower income from the MTNS segment.
Lau said REDtone will be seeing a recurring income from the telecommunications services business of RM80 million yearly. For the MTNS business, he said the group expects to generate about RM60 million yearly from various projects.
Lau said the group has allocated RM10 million as capital expenditure for infrastructure building for the telecommunications services and MTNS. This will be funded by internal generated funds.
REDtone expects the IDS segment, in particular the teleradiology business, to achieve some breakthrough in the current year at the regional level in India, Sri Lanka, Indonesia and the Philippines.
He said that through REDtone’s cloud platform, hospitals will be able to send X-rays, CT scans, as well as MRIs to radiologists to interpret the images and report back to the hospitals.
Noting that the IDS business only contributes about 2% to REDtone’s total revenue at present, Lau said the group is aiming to increase that to about 10% in the next two to three years.
“I’m hoping to start securing some [teleradiology] contracts from hospitals overseas,” said Lau. As for local hospitals, REDtone is still working on securing contracts, he said.
Lau also said that REDtone is bidding for over RM1 billion worth of contracts from the Malaysian Communications And Multimedia Commission.
Source: The Edge