KUALA LUMPUR (June 25): Kronologi Asia Bhd (KL:KRONO) is targeting up to RM400 million in revenue for the financial year ending Jan 31, 2025 (FY2025) amid optimism on broader economic recovery.

“We are looking at anywhere between RM300 million to RM400 million,” said Kronologi chief executive officer Edmond Tay Nam Hiong at the company’s corporate briefing. He added that the company is well-poised to take advantage of the artificial intelligence (AI) growth trend in data-driven digitalisation and hybrid cloud.

“The top line is always driven by our infrastructure business. Our partnerships with Quantum and other members are still key drivers that will contribute to the infrastructure business,” said Kronologi’s executive director cum chief operating officer Tan Jeck Min.

“The cloud business is not the main revenue contributor to our group, but it is our key focus to grow the Cloud As-A-Service business," he stressed.

Kronologi is principally involved in the provision of enterprise data management solutions. For the financial year ended Jan 31, 2024 (FY2024), the company reported a revenue of RM301.39 million with a gross profit margin of 24%, leading to a net profit of RM8.63 million.

Its infrastructure segment accounted for 76% of its total revenue, while the remainder was derived from its cloud segment. The majority of its customers hail from Singapore, China and the Philippines.

At the same time, the group aims to streamline operating expenses instead of focusing on capital expenditure for requirements related to PPE (property, plant and equipment). It further attributed the decline in its net profit to the depreciation costs for the PPE.

“What we are looking at is to convert the capital into an operating model. It involves a bit of leasing and a bit of partners to take over the asset and manage it.

We would then lease the assets, which would result in lower costs compared to the existing depreciation,” said Tan.

For the first quarter ended April 30, 2024 (1QFY2025), revenue declined 8.4% year-on-year to RM57.75 million from RM63.03 million, while its net profit fell 43.4% year-on-year to RM1.44 million from RM2.55 million.

According to Kronologi, the decline in profitability was due to lower profit from its business operations and higher operating costs — such as solution centre-related expenses — as well as right-of-use assets and lower revenue.

Shares of Kronologi were down four sen or 9.4% to 38.5 sen at Tuesday’s market close, valuing the group at RM342.81 million. Year-to-date, the counter has lost 2.5%.