KUALA LUMPUR (Feb 22): REDtone Digital Bhd flagged intense competition in the telecommunications segment in the near term as it's second quarter net profit dropped by about half, despite a jump in revenue.
The group's net profit for the three months ended Dec 31, 2023 fell 45.2% to RM11.72 million from RM21.40 million in the corresponding second quarter a year earlier, which it blamed on lower margin at its managed telecommunication network services segment.
Revenue climbed 67.4% to RM89.70 million from RM53.59 million, as its MTNS segment recorded higher project activities under universal service provision projects, its bourse filing showed.
The weaker second quarter dragged its net profit for the first half of FY2023 down by 59.2% to RM14.43 million from RM35.35 million in the corresponding period in FY2022, despite revenue doubling to RM144.89 million from RM95.64 million.
“The board of directors anticipates business outlook for the remaining quarters to remain competitive, in particular its telecommunication services segment due to current intense competition,” it said.
Nevertheless, the group remained cautiously optimistic about its business prospects as it expected its MTNS and data services for enterprise market segments to continue to contribute positively to the group.
It also expects its ICT segment to grow earnings for the group after it secured a RM398.1 million contract from the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) earlier this month to provide unified communications solutions.
At Thursday’s market close, the counter saw its share price fall by two sen or 1.89% to RM1.04, valuing the group at RM813.75 million.