KUALA LUMPUR: HeiTech Padu Bhd expects its business outlook to remain challenging this year, despite posting a credible revenue growth in 2017.
HeiTech’s revenue climbed 18 per cent to RM426.9 million for the financial year ended December 31, 2017 from RM362.6 million in 2016.
HeiTech chairman Datuk Seri Mohd Hilmey Mohd Taib said its main priority this year was to defend, recover and explore.
“We will defend what we have, recover what we have lost as well as explore new markets, latest trend and technology and new offerings,” he said in a statement issued after its shareholders’ meeting here today.
“In order to remain relevant during this challenging period, competitive pricing strategy together with attractive offerings are crucial in differentiating ourselves against our competitors.
“We will continue to focus on optimising cost and strived to operate in the most efficient manner to improve efficiency, productivity and results without comprising on the quality of our services and deliverables,” Hilmey added.
HeiTech said the IT segment remained the biggest contributor to its revenue at RM322 million or 75 per cent in 2017.
The group had fared reasonably well since the previous two financial years, Himey said.
“Unfortunately, the good performance had stalled in 2017 when the group recorded a net loss of RM15.3 million.”
Despite higher revenue, the newer contracts secured during the year with lower margins and conclusion of a major contract with significant margin from the IT segment have significantly reduced the overall performance of the group.
“2017 has been another challenging year for HeiTech and its group of companies. Factors like prudent spending by the public sector, rising costs of business and increasingly saturated market that led to stiffer competition have placed significant pressure to the group in the meeting the expectations of the stakeholders.
“However, the group remains perseverance in facing the challenges to deliver quality services to the customers while working to expand the revenue base,” Hilmey said.
The group managed to secure contracts worth RM222.1 million in 2017, of which about RM127.7 million related to information technology. The remaining RM94.4 million was related to engineering works for the energy sector.
Among the significant contracts that were secured from the public sector are the maintenance of MyIMMS system for the Immigration Department of Malaysia worth RM42.4 million, and Ministry of Health for the development of clinical documentation module in its Patient Management System worth RM10.1 million.
In the private sector, the group secured a four-year contract for security infrastructure services of RM33.3 million for Companies Commission of Malaysia, and maintenance of managed wide area network (WAN) infrastructure services contract of RM41.9 million from Malaysia’s largest unit trust house.
As far as non-IT business is concerned, the group said it had invested in companies within various industries areas such as mailing and document processing, automotive parts database and engineering works.
Overall, this non-IT business contributed about RM109.2 million or 25.6 per cent to the group’s revenue in 2017.