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Malaysian Reserve
02-05-2025
- Business
- Malaysian Reserve
CTOS counter at all-time low, expat management passing leadership baton
CREDIT reporting agency CTOS Digital Bhd, with its shares hitting near all-time low, is seeing the departure of its chief at a time when it missed targets for three consecutive quarters. In a report released on April 28, BIMB Securities maintained its 'Buy' call on the counter but loweredits 52-week target price (TP) to RM1.27 from RM1.33 to reflect its trimmed FY25 earnings. On the same day, HLIB Research downgraded the counter to a 'Hold' from 'Buy' on April 28 with a TP of RM1.10. CTOS closed at 99 sen on Wednesday, after hitting a 52-week high of RM1.51. For the first quarter ended March 31, 2025 (1Q25), CTOS's net profit plunged 31% to RM14.4 million on a turnover of RM76.1 million which was up 6% from the same period last year. The segment profit from the Malaysia operations decreased by 29% to RM17.8 million compared to RM25.2 million in the corresponding period, mainly due to higher sales but offset by higher operational expenditures, it told the exchange. On April 25, CTOS also informed Bursa Malaysia the impending departure of its group CEO Erick Hamburger 'to explore new career opportunities.' It said both sides have mutually agreed that Hamburger's last day of employment will be on Sept 30 and Erick will be on leave from May 1. Until a suitable candidate has been identified, CTOS said the board has appointed its non-independent director Kevin Loh Kok Leong as Interim GCEO with effect from May 1. In its report, BIMB Securities, a unit of Bank Islam Malaysia Bhd (BIMB), noted the resignation of Hamburger and group chief technical officer James Fancourt Mitchell. 'This development is not entirely surprising after CTOS missed targets for three consecutive quarters. A wave of staff departures and market chatter around a key shareholder-led overhaul was on-going. On the bright side, this is arguably the right moment for the expat management to pass the baton to leadership with deeper local roots,' it said. While the basics and foundations of the CRA model can be replicated easily from developed markets, it said long-term success ultimately hinges on local adaptation and customisations. On its outlook, it said the business should continue to expand, supported by solid macro drivers and established systems and its brand prominence. HLIB Research said it noted that CTOS' 1Q25 core profit fell 31% year-on-year (YoY) due to lower gross profit margin (weighed down by less favourable sales mix) and higher opex (rise in marketing and administrative costs). 'Overall, results were below expectations and thus, we cut FY25-26 earnings by 14-15%. Also, we introduced FY27 estimates and flagged a potential profit cliff that unfortunately requires a recalibration in investor expectations. As such, the stock's risk-reward profile is no longer as compelling as before,' it said. — TMR
New Straits Times
25-04-2025
- Business
- New Straits Times
CTOS Digital CEO to exit in September, Q1 profit falls 31pct
KUALA LUMPUR: CTOS Digital Bhd has announced that group chief executive officer (CEO) Erick Hamburger will step down, with his last day of service set for Sept 30, 2025. Hamburger will begin his leave on May 1, the group said in a filing with Bursa Malaysia today. In the interim, board member Loh Kok Leong has been appointed group CEO effective the same date and will also be redesignated as executive director. "Since joining the group in 2021, Hamburger has contributed to CTOS Digital's growth and development," the filing said. "The board extends its sincere appreciation to Hamburger for his leadership over this period and wishes him continued success in his future endeavours." The announcement comes as CTOS Digital reported a 6.3 per cent year-on-year rise in revenue to RM76.1 million for the first quarter ended 31 March 2025. However, net profit fell 30.6 per cent to RM12.44 million. The firm declared a first interim single-tier dividend of 0.44 sen per share, representing a 70 per cent payout ratio. The dividend will be paid on July 23, with the entitlement date set for June 25. Hamburger said the group continues to see strong growth prospects both in Malaysia and across the region, particularly as financial institutions adopt more advanced credit analytics. "Innovation remains central to our strategy, and several product enhancements and new solutions are scheduled for launch in 2025," he said. He added that cost optimisation measures are underway, with expectations of improved cost-to-income ratios in the quarters ahead. CTOS Digital is Malaysia's leading credit reporting agency, with operations in Thailand, the Philippines and Indonesia. It serves a wide base of financial institutions, corporations, small and medium enterprises, and over four million individual users.
