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Ecobuilt to dispose of three units for RM12m to streamline business

TheEdge Mon, Jul 29, 2019 08:52pm - 7 months ago

KUALA LUMPUR (July 29):  Ecobuilt Holdings Bhd (formerly known as M-Mode Bhd) is selling three of its subsidiaries to its founder and former managing director Datuk Lim Thean Keong for RM12 million, as it seeks to focus on its core businesses. 

In a bourse filling, Ecobuilt said the company is disposing of M-Mode Mobile Sdn Bhd, Mobile Multimedia Sdn Bhd and Tameko Sdn Bhd, which are involved in the provision of mobile content and data application services.  

Ecobuilt said the contents and value-added services segment continues to face pressure from the increasing uptake of over-the-top (OTT) applications and more intense competition among existing and new industry participants. 

As a result, it said the management experienced difficulties in operating in the contents and value-added services industry. 

“It has also further aggravated with the departure of a few senior management staff with the experience, expertise and technical know-how to lead the contents and value-added services segment,” it added.  

Therefore, the board is of the view that the disposal would allow the group to streamline its operations by focusing on growing in the construction segment, by fully leveraging on the expertise of current key management in the construction industry.  

Ecobuilt expects a gain on disposal of some RM2.2 million. The proceeds from the disposal would be mainly used for working capital purposes and to fund its existing and future projects.  

The group said its construction segment had contributed RM62.3 million or 85.2% of the group’s total audited revenue for the financial year ended May 31, 2018 (FY18).  

For its nine months ended Feb 28, 2019 (9MFY19), Ecobuilt said the construction segment had contributed unaudited revenue of RM33.5 million or 78.2% of the group’s total unaudited revenue for the same period of RM42.9 million.  

“In contrast, the revenue generated from contents and value-added services segment had decreased by approximately 63.7%, from RM28.8 million in the financial period from Jan 1, 2016 to May 31, 2017 (FY17), to RM10.5 million in FY18,” it added.

Ecobuilt’s shares price closed unchanged at 20 sen today, giving it a market capitalisation of RM32.54 million. Year-to-date, its share price has retreated some 42.86%.

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