Financial Highlights

The following table sets out a summary of the combined financial information of the Group for the Financial Years / Period Under Review:

• The revenue increased from RM 20million in FYE 2021 to RM 23 million in FYE 2023 but decreased by approximately RM0.15 million or 1.31% from RM11.42 million in FPE 2023 to RM11.27 million in FPE 2024. It is mainly due to a decrease in revenue from the maintenance, support and professional services segment and resale of hardware and software segment which was partially offset by the increase in revenue from the implementation services segment. 

• The gross profit margin increased from 29.31% in FYE 2021 to 42.10% in FYE 2023 and grew from 38.64% in FPE 2023 to 42.03% in FPE 2024. The increase in GP margin may be attributed to the improved efficiency gained from their IT solutions employees’ familiarity with the WSO2 related software solutions.

• The PAT margin grew from 15.66% in FYE 2021 to 28.38% in FYE 2023.

• The gearing ratio is 0.21,  is below the benchmark. This shows the company can maintain its liquidity well and has room to increase the debt ratio to maximize the distribution between debt and equity. (A good gearing ratio should be between 0.25 – 0.5).

Major customers and suppliers

Revenue from the major clients collectively contributed 56.85%, 69.01%, 75.21% and 80.09% of their revenue for the Financial Years / Period Under Review, respectively. In particular, Telekom Malaysia Berhad Group has been contributing substantially to the Group’s revenue, accounting for 15.74%, 22.81%, 45.60% and 53.54% for the Financial Years / Period Under Review, respectively. The group has had projects with Telekom Malaysia Berhad Group which have commenced since 2007. Their significant contribution to their revenue for the Financial Years / Period Under Review may be considered a risk factor to the Group as they will continue to tender for new contracts from Telekom Malaysia Berhad Group should the opportunity arise. Due to their significant revenue contribution, terminations and loss of future opportunities with Telekom Malaysia Berhad Group without timely replacement may adversely impact the Group.

Major Suppliers

The Group’s top 5 major suppliers collectively contributed 94.69%, 98.07%, 89.25% and 96.65% to the Group’s total purchases respectively. The largest contributors for the Group’s purchases were Computrade Technology (Malaysia) Sdn Bhd and WSO2 which collectively contributed 70.98%, 87.99%, 66.24% during the Financial Years Under Review. Notwithstanding their large contribution to the total purchase, the Group is not dependent on Computrade Technology (Malaysia) Sdn Bhd and WSO2. Computrade Technology (Malaysia) Sdn Bhd is an authorised distributor of Oracle products in Malaysia and the group was recommended by their technology partner, Oracle to procure its products specifically enterprise infrastructure on-premise hardware and software from them. However, the Group is able to obtain the Oracle products from other authorised distributors recommended by Oracle. While WSO2, the company is their technology partner offering enterprise application integration software. The Group is not restricted from recommending other enterprise application integration software from their other technology partners.

Industry Overview

According to Providence's research, the enterprise IT services industry in Malaysia is anticipated to have a positive outlook and promising prospects throughout the forecast period. The COVID-19 pandemic and the subsequent lockdown measures have expedited the utilisation of the Internet and the adoption of digital platforms, paving the way for increased potential demand for enterprise IT services.

Consequently, this has created extensive opportunities for local enterprise IT services to broaden their business scope. Factors priming growth within the enterprise IT services industry include the ongoing digital transformation of the economy and the increasing demand for cloud computing and loT technologies. Notably, even sectors that were not traditionally considered heavy technology users, such as transportation and agriculture, have started integrating IT components into their operations.

Furthermore, the relatively high broadband penetration rate coupled with continuous capital expenditure into the multimedia and communications industry is conducive to the growth of the local enterprise IT services industry. Simultaneously, demand for enterprise IT services is expected to rise due to shifting consumer and business behaviours post pandemic. On the supply side, the Malaysian Government's robust support and the availability of skilled IT professionals are expected to further bolster the local enterprise IT services industry. The enterprise IT services industry in Malaysia was valued at RM21.30 billion in 2022 and expanded to an estimated RM22.36 billion in 2023. Moving forward, the local enterprise IT services industry is projected to expand at a CAGR of 5.7% from RM23.48 billion in 2024 to reach RM29.51 billion in 2028.

Future plans and strategies for  ELRIDGE ENERGY HOLDINGS BERHAD

A summary of the Group’s future plans and business strategies is set out below:

1. Expansion of their enterprise IT solutions portfolio to include AI-driven data handling and analytic solutions

2. Continuous strengthening of the Group’s enterprise application integration and enterprise data engineering and analytics solutions

3. Establishment of a COE for software solutions

4. Strengthening of their Singapore operations

MQ Trader View 

Opportunities

1. The group has an established track record in the enterprise IT services industry.

2. The group provides Internationally accredited quality services.

3. The company has a network of technology partners and vendors.

Risk 

1. The company is dependent on Telekom Malaysia Berhad Group as the major client

2. The group is dependent on their skilled IT employees to support their operations

3. Their growth and profitability are dependent on their ability to secure new and renewal of contracts

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Risk 

1. The company is dependent on Telekom Malaysia Berhad Group as the major client

2. The group is dependent on their skilled IT employees to support their operations

3. Their growth and profitability are dependent on their ability to secure new and renewal of contracts