May 31, 2010
Kuala Lumpur, 31 May 2010 - Financial solutions specialist eBworx Bhd has set an ambitious target to triple earnings, and morph into RM20 million profit after tax (PAT) company in a span of four years, said its CEO Tan Suan Fong.
Tan said that the plan involved eBworx growing with its tier-one customers across the region, and gaining strength via greater innovation of its solutions, which would result in up-selling to existing customers.
With the better economic outlook and profits, banks were investing again in information technology (IT) systems, which could spark growth at eBworx, Tan said.
“The tender flows have surged tremendously across the region… We would like to capitalise on this, to capture good customers which in turn could tap on to our regional presence,” he told The Edge Financial Daily via e-mail.
This surge in tender flows could signal growth for eBworx. The company posted RM1.71 million in net profit on RM7.87 million in revenue for the first quarter ended March 31, 2010 (1Q10). In contrast to a year earlier, net profit gained by 143% despite revenue rising only marginally by almost 2%.
It is also noteworthy that 1Q10 net profit is about 84% of the entire FY09 net profits.
In its notes, which accompanied its financials, eBworx said that the better numbers were a result of improved operational efficiency and other operating income from net settlement received from Affin Bank Bhd, which had discontinued a suit.
If the 1Q net profits are annualised, eBworx would rake in as much as RM6.84 million for FY10. Tan said the company’s internal target this year was to at least maintain or marginally improve its 1Q earnings level for the next three quarters, to achieve RM7.2 million in net profit for FY10.
He added that over the year since eBworx commenced operations, the industry landscape had changed in terms of expansion and physical reach, and competition.
Tan said tier-one banks, especially those in Malaysia and Singapore have started going regional, and thus reviewing their IT blueprint and requirements from the perspective of having to meet regional standardisation and economies of scale.
“In order to be an IT partner for these banks, we have envolved ourselves to be a regional solutions provider with operations across Malaysia, Singapore, Indonesia, Thailand and China.
“eBworx has built up a team of professionals who understand the banking domain, regulatory requirements and across culture project execution in these countries,” he said.
A company would lose its competitive edge if it remains a local or one-country software solutions provider, as it will not be able to support its clients’ operations across the region, he said.
Tan said given the competitiveness in the banking landscape, IT had become more even more crucial to the financial institutions, adding that days of banks buying package software or engaging Indian software vendors to customize their software as per requirement was long gone.
He said banks look for business partners who constantly and proactively help them to leverage IT investment to improvise effectiveness and efficiency well as product and service innovation.
“We are the market leaders in this part of the world for credit management software (loan origination, collection and recovery) and Internet banking (consumer Internet banking, mobile banking, corporate cash management system and trade web services). As such, we are well-positioned to support the tier-one banks’ regional expansion,” he said.
Tan said eBworx was focused on building its core competencies of project management, business domain consultancy, technology, and research and development.
“As for the software engineering work, we are gradually outsourcing part of it to our development centre in Chengdu, China and subcontractor,” Tan said.
The company’s China business accounted for about one-third of the company’s revenue in FY09.
eBworx closed at 34sen last Thursday, gaining 2.5 sen.
This article appeared in The Edge Financial Daily, May 27, 2010.
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