Azanis Shahila Aman
KUALA LUMPUR: Serba Dinamik Holdings Bhd expects its business to grow exponentially despite volatility in the oil and gas (O&G) industry, driven by the expansion of its information and communications technology (ICT) segment.
Group managing director and chief executive director Datuk Dr Ir Mohd Karim Abdullah said the ICT segment would be a new source of growth for the company, especially since many O&G clients were ramping up investments in ICT applications globally.
"We put a trajectory of minimum RM350 million in revenue from the ICT segment in the financial year ending December 31, 2020 (FY20) which I truly believe that we should be able to achieve.
"If we look at the growth of 15-20 per cent as our target, we should be ending up somewhere around RM5.7 billion revenue," Karim told the New Straits Times in an interview.
Karim said the company was bolstering its ICT capability in a big way, emphasising on internally-developed mobile application, e-commerce platform and digital theme parks.
"I would like to emphasise here that we are a company that takes care of our stakeholders by emphasising sustainability elements and we are a company which believes in technology.
"We will work hard to acquire that technology in house, we will collaborate with other companies who have the capability and we believe that all this technology will move our company to compete in the future," he said.
Serba Dinamik's ICT scope is segmented into cloud computing, artificial intelligence, cyber security, financial technology and frontier technologies divisions.
Meanwhile, Karim said the recurring nature of its operation and maintenance (O&M) order book would also ensure earnings sustainability in the foreseeable future despite lower prospective contract wins seen for FY21.
"We have multiple numbers of O&M contracts that are expected to be renewed, and even though the contract value is not big, if we combine it all together it is something which is sizable.
"This is strategy what we called it as a sustainable kind of approach driving our company forward," he said.
On its liquidity, Karim said the company had sufficient liquidity to ease financial strains and support intermediation activities during the Covid-19 crisis.
"The company has sufficient liquidity of RM1 billion. If we look at the amount of contract that we have in hand against the debts that we need to pay including the dividends of the sukuk and other interest related borrowing, we are still optimistic that we are in a very good position.
"However, we expect to have more sizable kinds of jobs in 2021. We are quite comfortable and confident that we will be able to move forward regardless of all the various challenges that everybody has at the moment. We will do fundraising exercises to improve our equity. Moving forward, we will have more room to look at the debts or to raise further sukuk," he said.
Commenting on the oil and gas outlook, Karim said Serba Dinamik was hoping that the average crude oil price per barrel in 2021 would be around US$50-US$55, supported by an output discipline by OPEC and a potential Covid-19 vaccine boosting demand in the second half.
He said the potential rollouts of vaccines in the short term would be a turning point for demand as it could lead to a more sustainable economic recovery.
"The vaccine will be rolled out next year, it means factories which are closed will be lifted and the use of oil goes up to the normal. With that the price of oil will also go up because the situation is supply and demand. We are of the opinion that by 2021 all this should gradually go back to normal," he said.
Serba Dinamik's net profit rose 30.8 per cent to RM148 million in the third quarter (Q3) ended September 30 2020 from RM113.2 million in the corresponding period last year, in tandem with its higher revenue.
During the quarter in review, the integrated engineering solutions company saw its revenue growing 41.8 per cent to RM1.48 billlion from RM1.05b illlion in the previous corresponding period, and its earnings per share to 4.39 sen from 3.36 sen previously.
For the nine months to September 2020, Serba Dinamik's net profit grew 20.8 per cent to RM429.6 milllion from RM355.8 milllion last year, resulting in its earning per share (EPS) growing to 12.75 sen from 10.56 sen previously.
Its cumulative revenue rose 32.5 per cent to RM4.2 billion from RM3.17 billion previously.