eBworx PAT records 58 per cent growth in first half of FY2007

Group bounces back into healthy growth mode of more than 30% y-o-y

Press Release:

PETALING JAYA - Aug 6, 2007 – eBworx Berhad (‘EBWORX’) today announces its results for the second quarter of financial year 2007 (Q2FY07), which ended on 30 June 2007.

The Group’s FY2007 first half PAT surged 58 per cent to RM6 million (from RM3.8 million as of the last corresponding period); on the back of RM21.1 million in revenue that reflects a 32 per cent increase from RM16.1 million in revenue in the first half of FY2006.

Effectively, as of the first half of FY2007, eBworx has already managed to achieve 82 per cent of its FY2006’s PAT.

Chief Executive Officer Tan Suan Fong(picture) expresses satisfaction at the Group’s sterling performance. “After a revenue growth flat for the past 3 years, eBworx’s topline is back to a healthy growing mode of more than 30 percent.”

Tan Suan Fong

“The team is obviously highly motivated that the Group’s continuous and concerted efforts to focus on securing new contracts with healthy margins and cost reduction initiatives are paying off well with proven results.”

“eBworx generated a strong positive operating cash inflow which was close to RM3mil in the first half of FY2007.”

The Group’s profit before tax (PBT) for Q2FY2007 is reported at RM2.872 million as compared to RM1.91 million recorded in the corresponding quarter last year. Earnings Per Share (EPS) for Q2FY2007 stands at 1.31 sen as compared to 0.89 sen in Q2FY2006 as recorded at 30 June 2006.

Riding the Basel II Wave

Tan is optimistic of even better performance by the Group as the banking software sector that eBworx plays in continues to experience greater demand trends fueled by industrial trends.

“We are experiencing a strong market demand for our solution offerings and the critical factor for this is that eBworx is the acknowledged market leader in Credit Management Software. The Group is continuing to land significant contracts in Malaysia, Indonesia, Thailand and China, by piggybacking on the wave of Basel II that is sweeping the region with top-down compliance instructions by central banks,” says Tan.

As regional banks seek to increase their competitiveness and provide better services, the financial industry is also seeing increased investments to revamp electronic banking channels such as Internet banking, mobile banking and cash management – all of which contribute positively to drive the Group’s business.

On top of this, eBworx is actively marketing its new Trade Finance solution which allows banks to benefit from the fastest time-to-market cycle for trade product configurations.

“The Group has a strong, unwavering ‘S2 -Software and Services’ vision. In aligning our strategy to this vision, we are putting in significant efforts to grow our in-source IT managed services to capitalize on this growing market requirement.”

A Consistent and Satisfactory Cycle

Tan also shares on the Group’s average invoicing and collection cycle:-

“Based on our quarterly trend, eBworx turns between RM10-12 million of work-in-progress (WIP) to invoice, and turns between RM10-11 million of Account Receivables (AR) into cash collected on quarterly basis. This cycle has been consistent, and both the management and board are with happy with the Group’s financial performance”.

“In term of concentration risks, I would like to emphasize that eBworx sells to, and services a group of clients who are primarily large financial institutions. As such, it is inevitable that our customers are few in numbers as compared to other industries.

Furthermore our business strategy is to focus on Tier-1 banks with stronger IT spending capabilities. This may seem to amplify our concentration risks but do note that this (risk) is well mitigated by the exceptionally strong credit standings of our customers who are reputable financial institutions within the region.”

About eBworx

MSC-status eBworx is a home-grown regional financial solutions specialist, providing a wide array of innovative digital commerce solutions to the financial services industry which include software products, technology consulting and systems integration services that enable financial institutions to improve their sales operational efficiency and manage credit risk.

The eBworx Group has five wholly-owned subsidiaries – Digital Nervous Systems Sdn Bhd, eBworx International Pte Ltd, eBworx Technology (Chengdu) Co Ltd, eBworx Technology (Beijing) Co Ltd and eBworx (Indo-China) Co Ltd. The principal activity of all four companies is the provision of computer software applications and dealing in computer software and hardware for the financial services industry.

In 2001 and 2004, IDC Market Research (M) Sdn Bhd awarded the eBworx Group as a “Local Software Hero in Malaysia” as recognition for its position as a significant software company in Malaysia.

eBworx clientele includes RHB Bank Berhad, AmBank Group, Alliance Bank Malaysia Berhad, Al Rahji Bank, OCBC Bank, EON Bank Group, UOB Group, PT Bank Central Asia (Indonesia) PT Bank Internasional Indonesia, Krung Thai Bank, KASIKORNBANK, Capital OK Company Limited, PT Bank Lippo, PT Bank Danamon, among others.

Institutional Investors

eBworx institutional investors include OSK Venture Equities Sdn Bhd, a venture capital company of OSK Ventures International Berhad and CSE-Infotech Limited, a wholly-owned subsidiary of CSE Global Limited, which is listed on the Main Board of the Singapore Exchange.

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