GHL System Berhad Annual Report 2020

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 MANAGEMENT DISCUSSION AND ANALYSIS CONT’D 3. PERFORMANCE BY BUSINESS SEGMENT AND GEOGRAPHY (Cont’d) 3.1 Performance By Business segment (Cont’d) a) Transaction Payment Acquisition (“TPA”) Segment (Cont’d) (ii) GHL (electronic payment services) (Cont’d) Table 2 GHL Electronic payments TPA (All stated in RM'millions unless stated otherwise) YTD 2019 YTD 2020 % change Transaction Value Processed 9,810.0 15,226.9 55.2% Gross Revenue 77.3 74.7 -3.3% Gross Revenue/Transaction Value (Note 1) 0.8% 0.5% -39.2% Gross Profit 31.9 27.9 -12.4% Gross Profit/Transaction Value (Note 1) 0.3% 0.2% -43.6% Merchant Footprint - TPA Only (Thousands) 95.3 103.9 9.0% Note 1 - Gross Revenue or Gross Profit respectively divided by the Transaction Payment Value expressed as a %. b) Shared Services Segment Shared services segment revenue declined by -8.1% yoy to RM121.1 million (2019: RM131.8 million), due to lower EDC terminals sales and deployment from the movement control restrictions and cautious spending by the banking sector in light of the uncertainty of COVID-19 in 2020. c) Solutions Services Segment Solutions services revenue improved +26.3% to RM14.9 million (2019: RM11.8 million), due to the deployment of a payment network project for a client in Thailand. 3.2 Performance by Geography Group revenue for 2020 was down -3.8% yoy to RM334.5 million (2019 – RM347.6 million) with yoy declines recorded by Malaysia, Philippines and Thailand. Despite the decline in topline revenues, the group was able to maintain gross profit margins of 43.1% (2019 YTD – 43.3%). 2020 registered a pre-tax profit of RM21.3 million compared to RM43.6 million a year ago. However, in 2020, there were two key non-cash expenditure included in the financials, namely, fair value loss on the 2018 Paysys acquisition consideration shares (RM6.1m) and write-down of the group’s Cambodia investment (RM11.9m). If these two one off items were added back, the group’s adjusted pre-tax profits would have been RM39.3 million compared to RM43.6 million in 2019. Malaysian’s contribution was stable at 79.6% (2019 – 78.4%) of group revenues and registered a -2.3% yoy decline due to lower Solutions Services and Shared Services (slower EDC hardware sales and rental/ maintenance revenue). Although TPA revenues were slightly higher yoy, overall revenue contribution from Malaysia was down. Philippines revenue was -1.7% yoy lower at RM44.8 million (2019 – RM45.6m) with TPA and solutions services down marginally yoy but Shared Services showed a small improvement but overall country contribution was down -1.7% yoy.