Kronologi expects stronger revenue in coming quarters

KUALA LUMPUR: Kronologi Asia Bhd is aiming for a revenue of RM300mil to RM400mil for its financial year 2025 (FY25), a 15% to 20% hike from the previous year, driven by growth in both its business segments.

Kronologi’s main business segments consist of enterprise data management (EDM) solutions, as well as cloud and hybrid services.

Its chief operating officer Tan Jeck Min said between the two segments, the EDM segment will remain its main revenue contributor.

He added that Kronologi is looking to place more focus on the growth of its cloud-services segment.

“The infrastructure business will still continue to be the main contributor, as far as the top line is concerned.

“However, I think in both areas, it’s something that we seek to continue to grow,” he said during a briefing after Kronologi’s AGM yesterday.

Chief executive officer Edmond Tay Nam Hiong said the group is also expecting better profit margins on the back of balance sheet retooling efforts as it streamlines its operating expenses on property, plant and equipment (PPE).

“As we continue to grow our cloud business segment, the PPE costs will remain constant.

“However, we realised that this fixed cost will become expensive when business slows down, so, PPE is a concern.

“What we are looking at is to convert capital that we have invested into this operational-expenses model. So, this is something that we are currently working on and we should be working this out by the end of this quarter,” he said.

With its gross profit margin averaging around 25% for the past few quarters, Tay said that Kronologi seeks to maintain and improve the number.

That being said, he stated that the group is optimistic on its overall performance for FY25.

For its first quarter (1Q25) ended April 30, 2024, Kronologi posted an 43.43% year-on-year (y-o-y) drop in net profit to RM1.44mil, reflecting basic earnings of 0.19 sen per share.

Its revenue also fell slightly by 8.38% y-o-y to RM57.75mil from RM63.03mil posted in 1Q24.

Following the release of its results, Kronologi saw its share price falling to near a one-month low of 38.5 sen.

Commenting on the results, Tay said: “This is only the first quarter of the year. We have three more quarters to go, so we are fairly optimistic that we will improve our performance.

“But we will definitely be aiming for higher goals.”

Apex Research said in a note that Kronologi’s first quarter ended April 30, 2024 came in below expectations, dragged by slow recovery and higher than expected in operations cost, though it added that it remained optimistic over the company’s long-term prospects.

“We anticipate that the group will deliver better performance in the coming quarters alongside a broader economic recovery, as businesses are more willing to invest with a clearer economic outlook.

“Meanwhile, the company is retooling its balance sheet structure to streamline PPE operating expenses. We may expect better profit margins following the balance sheet retooling,” the research house said.