ECS Holdings enjoys higher profit thanks to focus on higher margin systems

SINGAPORE - ECS Holdings said its net profit increased to $9.7 million for the three months ended Sept 30 from $8.7 million a year ago as a result of the group's increased focus in higher-margin enterprise systems.

Revenue for the third quarter was $1.12 billion, up from $999.3 million a year ago, lifted by a 52 per cent rise in enterprise systems revenue to $490.8 million and an 8.5 per cent increase in IT services revenue to $8.7 million.

This mitigated a 6.9 per cent decline in revenue to $622.3 million for the distribution segment.

Gross profit grew by 9.7 per cent to $41.9 million but margin declined marginally to 3.7 per cent from 3.8 per cent in the same period last year, due to competition - mainly for servers and enterprise software products - from enterprise systems sales in North Asia.

Earnings per share climbed to 2.62 cents from 2.37 cents previously while net asset value per share firmed to 105.95 cents compared to 101.59 cents as at Dec 31.

"Worldwide IT spending continues to grow on the back of increased investments in technology in the consumer and enterprise segments," said chief executive officer Ong Wei Hiam.

"This would fuel demand for smartphones as well as enterprise products, which the group is focusing on."

The board is cautiously optimistic about the group's financial performance in the fourth quarter and for the full year.