GHL System Berhad Annual Report 2019

G H L S Y S T E M S B E R H A D 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) 16 3. PERFORMANCE BY BUSINESS SEGMENT AND GEOGRAPHY (Cont’d) 3.1 Performance By Business segment (Cont’d) b) Shared Services Segment Shared services segment revenue grew strongly by +29.0% YOY to RM131.8 million (2018: RM102.1 million), primarily due to the increase in sales of EDC terminals in Malaysia and Philippines, as well as the full 12-month consolidation of Paysys Sdn. Bhd. which was acquired by the group in mid 2018. c) Solutions Services Segment Solutions services revenue slightly declined -17.9% to RM11.9 million (2018: RM14.5 million), primarily due to lower software and Payment Network solutions sales. 3.2 Performance by Geography 2019 group revenue was higher by 16.3% YOY to hit RM347.7 million (2018 – RM299.1million) with growth delivered by Malaysia and Philippines, but a decline in Thailand due to higher hardware sales in the previous 2018 year. Pre-tax profits were up by 18.6% YOY to RM39.7 million, compared to RM33.5 million a year ago and net profit after tax and minority interest grew by 17.0% YOY to RM28.7 million (2018 – RM24.5 million). Malaysian operations contributed 78.4% (2018 – 76.4%) of group revenue and the 19.2% YOY increase was due to stronger rental and maintenance revenue as well as TPA revenues whereas Solutions Services revenue showed a decline of 27.4% in the twelve-months of 2019. However, EBITDA margins was higher at 19.1% for 2019 (2018 17.2%). Philippines revenue was 34.1% YOY higher at RM45.6 million (2018 – RM34.0million) with EBITDA margins at 38.6% from 30.5% on the corresponding year. All three divisions, TPA, Shared Services, and Solutions Services registered YOY growth in line with the growth in the revenue. Thailand recorded a decline in revenue of -19.7% to RM28.4 million from RM35.4 million previously dragged by lower Shared Services revenue as 2018 saw strong hardware sales from a Thai bank customer which was not repeated in 2019. TPA segment, however, saw revenue grew to RM12.3 million vs 2018 of RM8.4 million due to the ongoing merchant acquiring for the Chinese based e-wallet as well as domestic e-wallets. EBITDA margins remain positive at 15.5% compared to 15.3% in 2018. Other countries remain the smallest contributor to group operations at RM1.2 million or 0.3% of group turnover compared to 2018 turnover of RM1.2 million. The EBITDA contribution loss of RM2.8 million compared to RM0.5 million profit in the same period of the previous year was due to operational and investment costs incurred in the new market-Cambodia and Indonesia. Revenue by Country (RM mil) 2018 2019 350.0 300.0 250.0 228.5 35.4 28.4 45.6 34.0 1.2 1.2 299.1 347.7 272.5 200.0 150.0 100.0 50.0 - Malaysia Thailand Phillipines Total Other MANAGEMENT DISCUSSION AND ANALYSIS CONT’D