IPS Securex says it remains “well positioned” to help its customers re-assess their security concerns even as the threat of terrorism in Southeast Asia experienced a “steep decline” after the onset of the Covid-19 pandemic.
Other factors such as the climate crisis, the coup in Myanmar, the Russo-Ukrainian war and the tensions between China and the US have also “dwarfed the relative severity of terrorism”.
That said, Kelvin Lim, executive director and group CEO of IPS Securex says the threat of terrorism still exists if it “took a back seat” from the ongoing macro events.
“Nonetheless, as our customers in Asia re-assess their security concerns, we are well positioned to help them with the upgrading and enhancement of their security infrastructure and equipment, some of which are long overdue due to the Covid-19 pandemic and other factors,” he says.
“The opening up of country borders and vaccinated travel lanes (VTLs) means that we can now better engage with our customers to understand their latest requirements, and also visit our existing and new principals to understand their latest product developments so as to expand our product range of cutting-edge equipment and solutions for Asia,” he adds.
Lim’s remarks come as the group reported a net loss of $295,278 for the 2HFY2022 ended June, reversing from its profit of $197,608 in the same period before.
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For the FY2022, however, the group reported a 176% y-o-y surge to $263,451 from $95,437 in the FY2021.
Revenue for the FY2022 increased by 81.4% y-o-y to $8.7 million due to higher revenue from the group’s security solutions business and offset by lower revenue from its maintenance and leasing business.
The higher revenue from its security solutions business was due to the higher revenue from the sale of security products to customers in Singapore, Indochina and the rest of Southeast Asia and offset by the lower sale of security products to customers in East Asia. The higher revenue from providing integrated security solutions in Singapore also contributed to the revenue growth.
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Revenue from the maintenance and leasing business fell due to the expiry of a long-term seven-year lease-and-maintenance contract entered into with the Housing Development Board (HDB) in October 2014 for the Alert Alarm System in several blocks of residential housing for senior citizens, a decrease in revenue from the provision of maintenance support services to a customer in Singapore and partially offset by an increase in revenue from the provision of maintenance support services to customers in the rest of Southeast Asia.
Cost of sales increased by 119.4% y-o-y to $4.6 million due to the net increase in direct material costs and a higher proportion of integrated security solutions undertaken by the group which had a higher cost base relative to revenue.
As a result, gross profit increased by 39.6% y-o-y to $5.8 million.
Other income fell by 67.9% y-o-y to $309,336 mainly due to the decrease in government grants and subsidies.
Finance income surged by 566.7% y-o-y to $15.3 million mainly due to a net increase in foreign exchange gain of $14,000 and partially offset by a decrease in interest earned of $1,000.
Profit before income tax stood at $295,124 from last year’s loss of $26,450.
Earnings per share (EPS) for the FY2022 stood at 0.05 cents on a fully diluted basis.
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As at June 30, cash and cash equivalents stood at $8.4 million.
No dividend was declared for the period.
Shares in IPS Securex closed 0.6 cent lower or 12.25% down at 4.3 cents on Aug 25.