KUALA LUMPUR (May 18): ACE Market-listed enterprise data management and storage solutions firm Kronologi Asia Bhd does not expect any further major impairments to be made for the current financial year ending Dec 31, 2020 (FY20).
Kronologi posted a net loss of RM11.24 million in the first quarter ended March 31, 2020 (1QFY20), from a net profit of RM3.69 million a year ago, which mainly resulted from an RM11.64 million one-time, non-cash impairment to property plant and equipment (PPE) incurred in that quarter.
Its chief executive officer Edmond Tay Nam Hiong said a one-time impairment to PPE was taken to present a fair and transparent view of its operating assets.
“In the past two to three years, we had progressively invested in infrastructure for future growth. This year, where the environment is rather unpredictable [due to the Covid-19 pandemic], [we are] taking this opportunity to get ready for new infrastructure, to be prepared for the new normalcy coming this year,” Tay told reporters during a video conference call today on its latest financial results.
According to him, the new normalcy is referring to new types of demands required from its customers, which represents an opportunity for the company to refresh its infrastructure. Hence, the company made an impairment on older equipment, in a bid to refresh its “As-a-Service” infrastructure, which aimed at providing customers with “new normal” data solution offerings and performance.
Also, he said the company wanted to exercise prudence at an early stage of pandemic uncertainty, which could potentially be long-lasting.
“[The one-time impairment of PPE was a] pre-emptive strive to preserve the resilience of our balance sheet by tightening our overall operating expenses, and to review our capital spending strategies,” he further added.
In 1QFY20, Kronologi recorded a net loss of RM11.24 million, despite revenue jumping 60% to a record high of RM51.97 million from RM32.5 million.
The group’s profit from operations stood at RM1 million in 1QFY20, down 77.9% from RM4.53 million last year.
At the noon break, Kronologi shares were six sen or 9.68% lower at 56 sen, bringing some market capitalisation of RM292.53 million. The stock was heavily traded this morning with some 37.1 million shares exchanging hands, almost three times higher than its 200-day average trading volume of 12.92 million shares.