DeClout turns corner, records first profits

• 121% YoY revenue jump, gross profit up by 142%
• Revenue jump result of M&As as well as organic growth

SGX-Catalist listed ICT solutions and services provider DeClout Ltd said it posted a 165% increase in revenue year-on-year to record S$121 million (US$86 million) for the first half of its 2015 fiscal year (H1 2015), which ended June 30.
 
The revenue increase was the result of the group’s mergers and acquisitions (M&As) as well as organic growth across its IT Infrastructure Services and Vertical Domain Clouds (VDC) segments, the company said in a statement.

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EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) jumped more than six-fold over the six-month period to S$6.2 million (US$4.4 million). Gross profit increased by 142% to S$29.1 million (US$20.6 million), with gross margin of 24% in H1 2015.
 
[S$1 = US$0.71]
 
The group’s focus on expansion has meant that the synergies from its M&A and cost rationalisation have yet to kick in, DeClout said.
 
Profit before tax, however, showed a full turnaround for the first time, with the company recording a S$1.7 million profit in H1 2015 from a S$2 million loss in H1 2014. Profit after tax increased to S$800,000 in H1 2015, an improvement from a net loss after tax of S$2.1 million in H1 2014.
 
The group’s balance sheet remains strong with net asset value increasing by 41% to S$83.8 million, and net current assets increasing by 42% to S$34 million, from Dec 31 2014 to June 30 2015, DeClout said.
 
Furthermore, net asset value per share increased by 8% to 15.14 cents as of June 30. Basic earnings per share (EPS) turned to a positive 0.03 cents in H1 2015 from a negative 0.74 cents in H1 2014.

“… our H1 2015 results … set the stage for a performance upswing in the [second half of the year],” said DeClout chairman and group chief executive officer Vesmond Wong.
 
“Despite the trend that our results are usually weaker in the first half of the financial year due to seasonality, we posted solid year-on-year growth in revenue, operating profit, EBITDA, EPS and cash flow,” he said.
 
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