An overview of our business
Our group comprises three main segments: Unifiedcomms, GlobeOSS and Captii Ventures.
Throughout 2024, Unifiedcomms continued to address mobile network operators and integrated telecoms service providers with application and platform software, turnkey solutions and systems and a variety of professional and managed services. In 2016 a unit within Unifiedcomms called PostPay was revitalised into a fresh start- up and given prominence as part of a wider reorganisation of the Unifiedcomms business. PostPay focuses mainly on providing advanced solutions for prepaid credit on a managed service model.
GlobeOSS meanwhile, has evolved into Malaysia’s premier provider of data intelligence and AI solutions, serving diverse sectors - telecoms, healthcare, logistics, and manufacturing.
Unifiedcomms operates primarily in the telecoms-tech markets of three regions: South East Asia (SEA), South Asia (SA) and the Middle East and Africa (MEA) while GlobeOSS focuses exclusively on SEA. For Unifiedcomms, with the exception of Malaysia, Singapore and Pakistan, where engagement with the customer is conducted directly by our own personnel, the majority of our engagements with customers are carried out through various sales channel partners. This two-tier sales and distribution approach enables us to cost-effectively reach customers within each region of focus and to tap into the local knowledge and insights of our partners to build and deliver compelling solutions.
Captii Ventures, the venture investment arm of our group, focuses primarily on the SEA market for start-up investment opportunities. Our venture investment business regularly interacts with other venture capital (VC) management companies in the region and participates in funding rounds as either lead investor or as a co-investor following the lead investor.
As at end-2024, there are a total of 209 people that are employed in our group. The majority of these personnel are located in Malaysia, where our operational headquarters is situated, while the rest work out of Singapore, Pakistan, Brunei, Thailand and Indonesia.
Generally a disappointing year, but mixed across business segments
The group recorded consolidated revenue of S$17.6 million for the financial year 2024, a decrease of 3.9% as compared to the S$18.3 million achieved in 2023.
Unifiedcomms generated revenue of S$10.2 million in 2024, a 12.7% decline from the S$11.7 million achieved in 2023. In contrast, GlobeOSS had a 11.9% increase in revenue, reporting total revenue of S$7.3 million in 2024 versus S$6.5 million in the year before.
Lower revenue at Unifiedcomms was mainly due to a decline in managed service contract revenues, which dropped to S$8.8 million in 2024, from S$10.7 million in 2023. Although system sales contract revenues of this business in 2024 improved from S$1.1 million to S$1.5 million, this growth was insufficient to offset the decline in managed service revenues.
The Unifiedcomms customer base has traditionally been concentrated in the SEA region, and this remained unchanged in 2024. Unifiedcomms SEA region revenues accounted for 96.7% of total revenue recorded for the year.
GlobeOSS saw an improvement in system sale contract revenues in 2024, with an increase of 19.4%, from S$4 million in 2023 to S$4.8 million in 2024. Meanwhile, managed service contract revenues for the business remained flat compared to 2023.
GlobeOSS continues to have both its system sale and managed service business concentrated in the SEA region. The increase in GlobeOSS revenue from the SEA region reflects a S$0.8 million improvement in system sale contract revenues from 2023 to 2024.
Decline in managed service revenues
The decline in group revenue this year compared to last year was mainly attributable to the 14.3% or S$1.9 million decrease in Unifiedcomms managed service contract revenues. Meanwhile, system sales contract revenues in 2024 improved from S$5.1 million to S$6.2 million. However, this growth was not enough to offset the decline in managed service revenues.
The revenue region that proved most disappointing was SEA, where its contribution fell from S$18 million in 2023 to S$17.2 million in 2024. Meanwhile, the contribution of the SA and MEA regions remained flat compared to the year before, with both contributing S$0.1 million and S$0.2 million respectively in 2024.
In 2024, SEA, our home region, continues to be the largest geographic source of revenue, accounting for 98.1% of group topline.
Higher gross profit achieved, despite lower revenue
Although group revenue was lower in 2024, gross profit achieved for the year was higher compared to 2023.
Group gross profit for 2024 was S$9.4 million, up by S$0.9 million or 10.3% against what was recorded in 2023. The higher gross profit was primarily driven by an improved overall gross profit margin of 53.4% on group revenue, compared to 46.6% in the year before.
The average gross profit margin of system sale contracts improved to 64.4% in 2024, compared to 55.2% in 2023. This was primarily due to higher contribution from Unifiedcomms system sale contracts as well as an improved gross profit margin for GlobeOSS in 2024, driven by lower third-party costs. Meanwhile, gross profit margin earned on managed service contract revenues increased from 43.3% recorded in 2023 to 47.4% this year, primarily due to lower third-party costs on certain Unifiedcomms managed service contracts.
The sales mix of our group in 2024 continued to show more than fifty percent of group revenue being generated from managed service contracts. This year, managed service contract revenues accounted for 64.5% of group revenue, down from 72.3% in 2023. This decline was mainly due to an increase in system sale contract revenues of the group, which grew by 23.4%, arising from S$5.1 million in 2023 to S$6.3 million in 2024.
Lower total opex after exceptional items
Our group’s operating expenditure for the year decreased to S$18 million in 2024, compared to S$20.1 million in 2023. This decrease was mainly due to a lower impairment loss and a reduction in the fair value loss being assessed on our venture investment portfolio.
In 2024, we recorded an impairment loss of nearly S$2.5 million on goodwill, intangible assets and plant and equipment. This was lower than the S$4.2 million impairment loss on goodwill recorded in 2023.
The impairment loss represented the amount by which the carrying amount of the group’s Unifiedcomms cash-generating unit (“CGU”) exceeded its recoverable amount. This was mainly caused by certain managed services contracts under this CGU that are now believed to produce lower-than-expected profitability and returns. This impairment loss has no cash impact.
Meanwhile, the challenging market conditions for fundraising and valuations led to a significant decline in the fair value of the group’s venture investment portfolio. As a result, we recorded a fair value loss of S$6.2 million in 2024, compared to S$6.8 million in 2023.
Excluding the impact of exceptional items charged to the income statement this year, such as the fair value and impairment losses, our group operating expenditure for 2024 was S$9.3 million, an increased on the S$9.1 million recorded in 2023. This increase was due to higher technical support expenses, caused by an increase in headcount.
Negative bottom line from large non-cash charges
The group net loss for the year was S$8.7 million, 26.1% lower than the S$11.7 million net loss recorded in 2023. This decrease in our group’s negative bottom line was due to the lower fair value loss and impairment loss on assets, which totalled S$8.7 million, compared to S$11 million recorded in 2023. These exceptional losses had no cash impact on our business.
In terms of margins, our group recorded a negative net profit margin of 49.3% for 2024, as compared to the 64.1% recorded in 2023.
When the bottom-line numbers are examined more closely, excluding exceptional losses such as the fair value loss on the Captii Ventures investment portfolio, and the impairment loss on goodwill, the profit performance of Unifiedcomms and GlobeOSS becomes more apparent. Excluding these non-cash items, Unifiedcomms and GlobeOSS recorded an ‘adjusted’ net profit of S$0.1 million in 2024, in contrast with the ‘adjusted’ net loss of S$0.7 million recorded in 2023. The improvement in the performance of Unifiedcomms and GlobeOSS was primarily due to improvement in gross profit margin.
We recorded negative EBITDA of S$7.7 million in 2024, in line with our group’s net loss for the year. A significant proportion of this negative EBITDA is attributed to the fair value loss on the Captii Ventures investment portfolio and the impairment losses on goodwill, intangible assets and plant and equipment.
Removing the impact of these non-cash items in 2024, the cash generation performance of our underlying businesses becomes more evident. EBITDA before exceptional items stood at S$1 million for 2024, representing an increase of 119.6% against what was recorded in 2023.
Because of the various exceptional losses, our group recorded a negative return on equity (ROE) of 20.9% for the year.
Investing in (external) technology and innovation
As at end-2024, we continued to have sufficient capital to augment our organic growth plans with growth by strategic investment. This remains an essential albeit less significant element of our current business plan that target sustained and double-digit group profit growth, and a significant uplift of our ROE performance.
Throughout 2024, our venture investment business evaluated several investment opportunities. However, none progressed to completion. We ended 2024 with a portfolio of five remaining investments in new technology ventures and start- ups.
Reviewing our 2024 balance sheet
Turning to our group’s balance sheet, we ended 2024 with current assets of S$24.3 million, which was flat compared to the year before. This was mainly attributable to an increase in trade and other receivables, which rose from S$8.7 million to S$11 million, driven by major system sale contracts awarded and billed by GlobeOSS in late 2024. This impact was offset by a decrease in other non-financial assets, which decreased from S$4.6 million to S$3.3 million, mainly caused by lower contract assets. The reduction in contract assets was related to fewer uncompleted system sale contracts in the GlobeOSS business in 2024. Meanwhile, the group’s cash and cash equivalents as at end-2024 stood at S$10 million as compared to S$11 million at the end of 2023.
Our total non-current assets declined from S$23.8 million as at 31 December 2023 to S$16 million as at 31 December 2024, representing a decrease of 32.9%. This was mainly due to the decrease in other financial assets, resulting from the significant non-cash fair value loss assessed on the venture investment portfolio in 2024, as well as the impairment loss on goodwill (classified as intangible assets).
Total liabilities of our group fell from S$5.4 million as at 31 December 2023 to S$5 million as at 31 December 2024. This decrease is mainly attributable to a reduction in trade and other payables following repayments made in 2024.
Reviewing movements in group cash
Our group’s net cash used in operations was S$0.2 million in 2024, in contrast to the net cash generated from operations of S$0.3 million in the previous year. This was mainly due to higher working capital incurred of S$1.2 million in 2024, compared to S$0.2 million in 2023, resulting from lower collections from trade receivables in 2024.
Our group’s net cash used in investing activities for 2024 amounted to S$0.4 million, compared to S$0.5 million in 2023. This decrease was mainly driven by higher proceeds from the disposal of a venture investment in 2024 as compared to 2023. However, this impact was partly offset by increased investment in intangible assets.
The group’s net cash used in financing activities for 2024 was S$0.4 million, compared to S$1.1 million in 2023. The lower net cash used in financing activities was mainly due to the absence of dividend payout to equity holders and the absence of dividend payout by a subsidiary to non-controlling interest.
Business performance and outloof for 2025
We had expected system sale market conditions to remain somewhat challenging for our group in 2024, with growth to be driven by our managed service contract portfolio. However, this did not materialise. Both GlobeOSS and Unifiedcomms managed to secure an increase in system sale contract revenues. On the other hand, growth in our managed service contract was limited. Unifiedcomms, in particular, recorded lower managed service contract revenues due to the underperformance of certain existing managed service contracts.
There is still significant uncertainty and lumpiness expected in the contribution of system sale contracts to our group’s future results. The need for our group to continue to strengthen our managed service contract portfolio and to continue to develop new sources of sustainable growth, remains.
The outlook of Unifiedcomms and GlobeOSS is challenging. While the diminished performance of certain major managed service contracts, intensified pricing pressures, and delays in securing new opportunities adversely affected our business in 2024, significant steps were taken during the year to strengthen the fundamentals of the group.
Both Unifiedcomms and GlobeOSS will continue to make progress with contracts in-hand, reinvest in product innovation and market segment diversification, and enhance operational efficiencies.
At Captii Ventures, the group’s venture investment business, broader market conditions continue to be unfavorable, but an improving market is foreseen for start-ups in certain industries.
With continued fiscal discipline being applied by the group and the initiatives undertaken to strengthen business fundamentals of the group, we move into 2025 with optimism for the future.
| Wong Tze Leng | Anton Syazi Ahmad Sebi |
|---|---|
| Executive Chairman | Executive Director |
13 March 2025