DeClout expects to return to profitability in FY18

DeClout expects to return to profitability in FY18

Samantha Chiew
05/03/18, 10:54 am

SINGAPORE (Mar 5): DeClout expects to reduce its losses over the course of the year and return to profitability in FY18 given there should be no further losses from Corous360 after restructuring, the absence of major impairments and exceptional items and further reductions in expenses.

Overall, subsidiaries Beaqon, vCargo Cloud and Procurri are also expected to perform better.

The guidance comes after DeClout incurred its first net loss for FY17 of $16.4 million since it listed. This is compared to earnings of $7.8 million in FY16.

Following the results announcement, Vesmond Wong Kok Khun, chairman and group CEO, has reviewed the strategic direction following the results announcement.

DeClout’s business is to identify disruptive trends, incubate, scale and harvest high-growth technology companies. This has led to the spin-off of Mainboard-listed Procurri Corporation, as well as the trade sale of Acclivis Technologies and Solutions.

For a company of this nature, DeClout says shareholder returns may not reflect the group's intrinsic value. Instead, return to shareholder value may be better enhanced in future “harvests”, through possible in-specie share distribution to shareholders, corporate actions, or recycling capital to incubate more portfolio companies.

In its update, DeClout says subsidiary Corous 360 will exit direct participation in the e-commerce sector after undergoing restructuring in FY17 which has largely been completed with no further significant losses from the business unit expected.

Meanwhile, the group is focused on its 75% stake in Beaqon, whose primary business includes sales and distribution of telecommunications equipment, fit-out of data centres and the implementation of electronic and physical security projects.

Beaqon has also begun offering neutral hosting services, providing flexible and reliable in-building coverage and reliable in-building coverage for all IT and telecommunications applications.

The group is also planning to expand 50.01%-owned vCargo Cloud propriety CamelONE platform via China’s Belt and Road Initiative (BRI) given vCargo Cloud’s trade facilitation expertise, footprint and relationships can form the basis of a “Digital Silk Route” and offer opportunities related to blockchain and trade financing.

As at 10.50am, shares in DeClout and Procurri are trading at 7 cents and 20 cents respectively.

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