Dagang Net confident of boosting earnings

Published by The Star

DAGANG Net Technologies Sdn Bhd, Malaysia 's first e-commerce company, is confident of achieving 50 per cent increase in net profit despite an estimated revenue growth of only 5 per cent.

Its chief executive officer Saifol Shamlan said the company should be able to increase profit to about RM13 million this year due to improvements in its core efficiency and the retirement of old assets.

He also said the launch of its new products and services would be the key factor that contributes to the company's turnover.

“We will be introducing new services, namely e-Permits, National e-Manifest, e-Banking and others, for the B2B (business-to-business) needs of the small- and medium-sized enterprises (SMEs) and multi-national companies. We expect the revenue to start rolling-in during the later part of the year.

“Hence, we forecast our revenue growth at 5 per cent,” Saifol said in Port Dickson yesterday.

The company's products — including e-Permits, e-Manifest, e-Declare, e-Logistic and others — facilitate the trading communities such as importers, exporters, and freight forwarders to do their trading via the Internet.

In the financial year ended December 31 2004, Dagang Net registered a revenue of RM46.6 million on profit before-tax (PBT) of RM8.3 million, representing a 27 per cent increase in its revenue and 140 per cent increase in PBT (RM3.4 million) from the year before.

“The huge jump in profit in 2004 was due to the sudden increase of ports subscribing our services,” said Saifol.

Dagang Net, majority owned by UEM Group through Time Engineering Bhd, was set up in 1989 and secured a 15-year concession from the Government to administer the national electronic data interchange (EDI) infrastructure. It has a paid up capital of RM54 million.

“Our purpose was to develop a system that reduces paperwork, allowing quicker clearance of goods and cargo through a direct linkage with the Royal Malaysian Customs,” said Saifol.

Saifol said the company recently secured a 5-year extension agreement for its services with the department.

On Dagang Net's future plan, Saifol said the company will continue to upgrade and revamp its application systems. It has allocated RM20 million for this purpose since last year, and about RM14 million has been spent so far.

“We are also looking into new business opportunities, by pursuing new target audience such as the multinational companies and SMEs in Malaysia .

“We are also looking into expanding internationally to Pakistan , Bangladesh and also countries in West Asia through joint-ventures,” said Saifol.

The company will be organising a series of roadshows and forums — targeting SMEs, multinational companies and general public – to increase the awareness on the benefits of e-commerce and its services.