KUALA LUMPUR (Aug 16): IT software and platform provider ARB Bhd's net profit jumped 91.87% to RM16.28 million in the second quarter ended June 30, 2021 (2QFY21), from RM8.48 million a year before, despite lower revenue, as it recorded negative goodwill of RM12.7 million.

"The group has taken advantage of its strong cash position to acquire its business partner who is struggling with cash flow issues amidst the Covid-19 pandemic, resulting in a bargain acquisition for ARB and a negative goodwill of RM12.7 million during the quarter," said ARB executive director Datuk Seri Larry Liew in a statement.

The target company was struggling with cash flow issues mainly due to the impact of the Covid-19 pandemic, said Liew, adding it had healthy financial projections prior to that.

"I think the global healthcare crisis has created an unprecedented opportunity for us as the valuation of companies and assets has come down from its peak prior to the pandemic. We have benefitted from the strong cash position that enables us to obtain a bargain acquisition. We are convinced that the company will recover strongly going forward as the global vaccination roll-out continues and the world adjusts to the new normal. This will help drive growth forward," Liew said.

The group's quarterly revenue declined 15.5% to RM46.76 million from RM55.34 million a year ago.

For the cumulative six-month period ended June 30, 2021, its net profit grew 50.79% to RM23.1 million from RM15.32 million a year ago. Revenue grew 8.52% to RM96.25 million from RM88.69 million, thanks to better contributions from enterprise resource planning (ERP) and Internet of Things (IoT) segments.

On its prospects, ARB said the ERP and IoT segments are expected to contribute impressive future earnings.

Shares of ARB closed up 3.5 sen or 14% at 28.5 sen, translating into a market capitalisation of RM173 million. The company shares were actively traded today with 40.36 million shares traded, making it among the top 20 active counters on local bourse today.

ARB's trading volume today more than doubled from its 200-day average of 19.57 million shares.