DeClout, a Catalist-listed holding company for technology firms, has outlined steps it plans to take to return to profitability after reporting a net loss of $16.4 million last year.
In December, DeClout took a $5.8 million impairment for ZiPAY, its Indonesia-based e-money platform. This was shortly after it raised its beneficial interests in ZiPAY from 75.3 per cent to 100 per cent in September last year.
Goodwill pertaining to ZiPAY was fully impaired as operations are at a standstill until ZiPAY receives an e-money licence to transact in Indonesia.
DeClout's executive director for finance Cheryl Tan said: "At that time, we were positive that the licence was coming in. The government gave us representations that it would be issued within one to two months... Thereafter, the issuance of licences stopped."
Chairman and group chief executive Vesmond Wong added: "We've been waiting for more than 21/2 years. We have completed all the documentation."
All of DeClout's portfolio companies are loss-making, except Beaqon, which sells telecommunications and network infrastructure solutions. It contributed $3.5 million to DeClout's bottom line last year.
Mr Wong said Beaqon is now in "scale mode". Last year, it generated revenue of $70.7 million. As of Jan 31, it had an order book of $45 million (excluding 17 neutral hosting contracts), which will be largely recognised this year, he added.
DeClout aims to finally put to use a $10 million grant made by the National Research Foundation (NRF) in 2016 to invest in up to two tech start-ups this year.Chairman and group chief executive Vesmond Wong said DeClout Investments will invest up to $1 million in each start-up, which the NRF will match with another $1 million.
Another subsidiary, Procurri, expects to swing back into the black this year. On Feb 28, Procurri chairman and global CEO Sean Murphy relinquished his role as an executive officer of DeClout to focus on Procurri.
DeClout also aims to finally put to use a $10 million grant made by the National Research Foundation (NRF) in 2016 to invest in up to two tech start-ups this year.
Mr Wong said DeClout Investments will invest up to $1 million in each start-up, which the NRF will match with another $1 million.
DeClout has also embarked on a cost-cutting programme. Mr Wong's basic salary will be slashed by 40 per cent this year. Last year, his basic salary was in the range of $552,500 to $595,000. Senior management and managers will see their basic pay reduced by 20 per cent this year, while all staff will take a pay freeze.
DeClout said it expects corporate expenses this year to decline by at least 20 per cent from $7.6 million in 2017.
DeClout shares closed up 0.5 cent, or 7.14 per cent, to 7.5 cents yesterday after the business update was issued.