After four consecutive financial years of losses, Ban Joo says it has finally achieved a turnaround in net profit of $3 million for the 18 months ended 31 March 2010 (FP2010), compared to a net loss of $28 million in the previous corresponding period, although revenue declined 37% to $12.2 million from $19.4 million.

The turnaround was mainly due to an $18.9 million reduction in impairment loss on trade receivables, a $3 million decline in interest expenses, and a $4.9 million reversal of surplus interest expense accrued in prior years following a full settlement of bank borrowings.
 

In a bid to turn itself around, Ban Joo recently acquired Multi Skies Nusantra (MSN), a company which builds, operates and leases base station controllers for universal service obligation (USO) sites.

Powered by solar cells, these USO sites will make telephony services and infocomm technology access services available to remote villages in Indonesia, bypassing limited infrastructure.

Via MSN, Ban Joo will be involved in the building of some 4,700 USO sites in various Indonesia provinces, and will receive a monthly fee for each site that it builds and operates.

So far, more than 1,000 of these sites have been completed. MSN is expected to be a new profitable core business, and provide the group with steady income upon installation of the USO sites.

The company says it has also struck a deal with major shareholder Ban Joo Investment (Pte) Ltd to dispose of a subsidiary’s trade receivables for $16.2 million. It has since received $7 million as deposit, and will convene an extraordinary general meeting for shareholders to approve the transaction.

Upon completion of the disposal, Ban Joo will recognise a gain of $14.4 million in its 31 March 2010 financial accounts. Accordingly, its net profit for the financial period will be further boosted to $17.4 million.

The company is reporting results for an 18-month period following an approval from the Singapore Exchange for a change in its financial year-end from 30 September to 31 March.