For the first six months of FY2023, CTOS Digital saw its net profit rise 7.88% to RM37.71 million, from RM34.96 million in the same period of FY2022.

KUALA LUMPUR (July 27): CTOS Digital Bhd’s net profit fell 6% to RM21.13 million for the second quarter ended June 30, 2023 (2QFY2023) from RM22.48 million a year ago, despite a higher revenue. Earnings per share dropped to 0.9 sen from one sen.

In a bourse filing, the group attributed the lower earnings to higher selling and marketing expenses of RM10.26 million (versus RM8.59 million previously), higher administrative expenses of RM16.87 million (RM13.88 million) and higher finance costs of RM1.64 million (RM775,000).

The weaker quarterly result was also due to a higher tax expense of RM4.95 million, from RM266,000 in 2QFY2022, and lower other income of RM278,000, from RM1.28 million previously.

Revenue for the quarter increased 33.82% to RM62.24 million from RM46.51 million a year ago, on improved performance for the group's Malaysia and international operations.

For the first six months of FY2023, CTOS Digital saw its net profit rise 7.88% to RM37.71 million, from RM34.96 million in the same period of FY2022, while revenue increased 36.6% to RM121.84 million, from RM89.19 million.

On prospects, the group expects its subsidiaries and business segments to continue with the growth momentum into 2023 on the back of the continued recovery of the Malaysian and regional economies.

“Growth in the key accounts segment is expected to be driven by continued adoption of our leading digital solutions and analytical insights, and organic growth in the BAU [business as usual] business. The commercial segment should see growth through new account activations as well as increasing consumption of products and solutions as SMEs [small medium enterprises] look to onboard and assess the creditworthiness of customers more seamlessly,” said CTOS Digital.

The group also expects to expand its direct-to-consumer business through financial literacy programmes and partnerships targeting the 15 million credit active consumers in Malaysia.

The group said it will continue developing synergistic opportunities in its strategic investments in Malaysia and Thailand.

“We expect our investments to enhance our value proposition to our clients, from banks to SMEs, by offering unique and value-adding end-to-end digital lending solutions,” it added.

Shares in CTOS Digital closed up three sen or 2.22% at RM1.38 on Thursday (July 27), giving the group a market capitalisation of RM3.19 billion.