Microlink Solutions Bhd.MYX: MICROLN

Financial Year 2025 1st Quarter Announcement

Aug 29, 2024 at 11:03 AM UTC · Issued by Microlink Solutions Bhd.

MICROLINK SOLUTIONS BERHAD

Company no. 200301018362 (620782 - P)

(Incorporated in Malaysia)

INTERIM FINANCIAL STATEMENTS FOR THE FIRST QUARTER ENDED 30 JUNE 2024
Table of contents	Page
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income	1
Condensed Consolidated Statement of Financial Position	2
Condensed Consolidated Statement of Changes in Equity	3
Condensed Consolidated Statement of Cash Flow	4
Notes to the Interim Financial Report	5 - 6
Explanatory notes pursuant to Bursa Securities Listing Requirements	7 - 9

MICROLINK SOLUTIONS BERHAD (200301018362 (620782 - P))

Incorporated in Malaysia

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE FIRST QUARTER ENDED 30 JUNE 2024

	INDIVIDUAL QUARTER		CUMULATIVE PERIOD
	THREE MONTHS ENDED		THREE MONTHS ENDED
	30 JUNE		30 JUNE
	2024	2023	2024	2023
	RM'000	RM'000		RM'000	RM'000
	Unaudited	Unaudited		Unaudited	Unaudited
Revenue	61,506	56,932	61,506	56,932
Cost of sales	(45,838)	(43,505)	(45,838)	(43,505)

Gross profit	15,668	13,427	15,668	13,427
Other operating income	99	1,017	99	1,017
Selling and distribution expenses	(3,167)	(361)	(3,167)	(361)
Administrative expenses	(15,556)	(7,390)	(15,556)	(7,390)
Finance costs	(903)	(565)	(903)	(565)
Other operating expenses	(1,081)	(1,949)	(1,081)	(1,949)

(Loss) / Profit before taxation	(4,940)	4,179	(4,940)	4,179
Taxation	-	(473)	-	(473)

(Loss) / Profit for the period	(4,940)	3,706	(4,940)	3,706
Other comprehensive loss, net of tax
- item that may be reclassified subsequently to profit or loss:
Foreign currency translations for foreign operations, net of tax	123	(71)	123	(71)

Other comprehensive loss for the period, net of tax	123	(71)	123	(71)

Total comprehensive (loss) / income for the period	(4,817)	3,635	(4,817)	3,635
(Loss) / Profit attributable to:
Owners of the parent	(4,441)	3,706	(4,441)	3,706
Non-controlling interests	(499)	-		(499)	-
	(4,940)	3,706	(4,940)	3,706
Total comprehensive (loss) / income attributable to:
Owners of the parent	(4,318)	3,631	(4,318)	3,631
Non-controlling interests	(499)	4		(499)	4
	(4,817)	3,635	(4,817)	3,635
Earnings per share (sen):
Basic	(0.41)	0.35	(0.41)	0.35
Diluted	(0.41)	0.35		(0.41)	0.35

Note:

These condensed interim financial statements should be read in conjunction with the audited financial statements for the year ended 30 June 2024 and the accompanying explanatory notes attached to the interim financial statements.

Page 1 of 9

MICROLINK SOLUTIONS BERHAD (200301018362 (620782 - P))

Incorporated in Malaysia

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2024

	As At	As At
	30 June 2024	31 March 2024
	RM'000	RM'000
	Unaudited	Audited
ASSETS
Non-Current Assets
Property, plant and equipment	2,473	2,158
Right-of-use assets	2,805	3,002
Goodwill	25,990	25,990
Software development expenditure	97,120	100,724
Other investments	105	105
Lease receivables	771	771
Deferred tax assets	2,576	2,576
	131,840	135,326
Current Assets
Inventories	2,001	1,156
Contract costs	40,862	38,170
Other investments	-	89
Trade receivables	82,093	99,539
Other receivables, deposits and prepayments	23,249	23,680
Contract assets	12,515	32,376
Lease receivables	140	195
Current tax assets	12,186	11,577
Cash and bank balances	18,826	13,464
	191,872	220,246

TOTAL ASSETS	323,712	355,572
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital	166,260	166,260
Reserves	(405)	(528)
Retained Earnings	28,787	33,228
	194,642	198,960
Non-controlling interests	(1,060)	(561)
TOTAL EQUITY	193,582	198,399
Non-Current Liabilities
Deferred tax liability	4,924	4,924
Provision for gratuity obligations	-	-
Trade payable	-	423
Other payables and accruals	197	197
Lease liabilities	3,267	3,267
	8,388	8,811
Current Liabilities

Trade payables	26,923	55,238
Other payables and accruals	20,389	29,986
Contract liabilities	20,794	19,404
Borrowings	51,318	41,102
Provision for gratuity obligations	-	-
Lease liabilities	931	1,099
Current tax liabilities	1,388	1,532
	121,743	148,361
TOTAL LIABILITIES	130,131	157,173

TOTAL EQUITY AND LIABILITIES	323,713	355,572
Net assets per share (RM)	0.18	0.19

Note:

These condensed interim financial statements should be read in conjunction with the audited financial statements for the year ended 31 March 2024 and the accompanying explanatory notes attached to the interim financial statements.

Page 2 of 9

MICROLINK SOLUTIONS BERHAD (200301018362 (620782 - P)) Incorporated in Malaysia

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FIRST QUARTER ENDED 30 JUNE 2024

Unaudited

3 months ended 30 June 2024

At 1 April 2024 (audited) Profit for the period

Foreign currency translation for foreign operations Total comprehensive income for the period

At 30 June 2024

Unaudited

3 months ended 30 June 2023

<---------------------------------------	Attributable to Owners of the Parent -------------------------
<-----------------	Non-distributable	-------------------	>
			Total
	Exchange		attributable to	Non-
Share	translation	Retained	owners of	controlling	Total
capital	reserve	Earnings	the parent	interests	equity
RM'000	RM'000	RM'000	RM'000	RM'000	RM'000
166,260	(528)	33,228	198,960	(561)	198,399
-	-	(4,441)	(4,441)	(499)	(4,940)
-	123		123		123
-	123	(4,441)	(4,318)	(499)	(4,817)

166,260	(405)	28,787	194,642	(1,060)	193,582

At 1 April 2023 (audited) Profit for the period

Foreign currency translation for foreign operations Total comprehensive income for the period

At 30 June 2023

Note:

166,259	(214)	60,064	226,109	130	226,239
-	-	3,706	3,706	-	3,706
-	(75)	-	(75)	4	(71)
-	(75)	3,706	3,631	4	3,635

166,259	(289)	63,770	229,740	134	229,874

Page 3 of 9

MICROLINK SOLUTIONS BERHAD (200301018362 (620782 - P))

Incorporated in Malaysia

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE FIRST QUARTER ENDED 30 JUNE 2024

(The figures have not been audited)

	Preceding Year	Current Year		Preceding Year
	3 months ended	3 months ended		3 months ended
	31 March 2017	30 June 2024		30 June 2023
	RM'000	RM'000		RM'000
	Unaudited	Unaudited		Unaudited
CASH FLOWS (USED IN) / FROM OPERATING ACTIVITIES
(Loss)/Profit before taxation	2,522	(4,940)	4,179
Adjustments for non-cash items:
Amortisation of software development expenditure	2,761	3,603	4,148
Interest expense	2,516	903	576
Realised loss on foreign exchange		409	-
Depreciation of right-of-use assets	50	237	239
Depreciation of property, plant and equipment	838	132	41
Dividend income		-	(5)
Fair Value (Gain) / Loss on Investment		-	(259)
Loss on disposal of quoted investment		-	126
Interest income	(551)	(76)	(115)
Net unrealised loss/(gain) on foreign exchange	12	-	(8)

Operating profit before working capital changes	12,768	268	8,922
Net changes in assets	18,237	33,847	(4,347)
Net changes in liabilities	(18,424)	(36,746)	(2,089)

Net cash (used in) / from operations	12,581	(2,631)	2,486
Interest received		21	6
Tax paid	(5,000)	(753)	(3,247)
Tax refunded	48	-	1,064

Net cash (used in) / from operating activities	7,629	(3,363)	309
CASH FLOWS (USED IN)/ FROM INVESTING ACTIVITIES
Acquisition of a subsidiary, net of cash acquired	-	-	13
Addition of software development expenditure	(35,483)	-	(1,520)
Interest received	551	55	109
Dividend received		-	5
Placement of deposits pledged to licensed banks	(701)	(947)	(321)
Net disposal/(purchase) of other investments	65	89	(239)
Purchase of property, plant and equipment	(375)	(487)	(44)

Net cash used in investing activities	(35,943)	(1,290)	(1,997)
CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES
Dividend paid	(2,516)	-	-
Interest paid	(2,516)	(903)	(509)
Net drawdown of borrowings	5,035	10,216	(8,622)
Payments of lease liabilities	17,757	(168)	(650)

Net cash from / (used in) financing activities	17,760	9,145		(9,781)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		4,492	(11,469)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE PERIOD	24,740	3,328	25,742
EFFECTS OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS	9	87	(228)
CASH AND CASH EQUIVALENTS AT END

OF THE PERIOD	24,749	7,907	14,045
		-

* Cash and cash equivalents at the beginning and end of the financial period are net of deposits pledged to banks.

Note:

Page 4 of 9

MICROLINK SOLUTIONS BERHAD (200301018362 (620782 - P))

QUARTERLY REPORT ON CONSOLIDATED RESULTS

FOR THE FIRST QUARTER ENDED 30 JUNE 2024

NOTES TO THE INTERIM FINANCIAL REPORT
A1 Basis of preparation

The interim financial statements are unaudited and have been prepared in accordance with the requirements outlined in the Malaysian Financial Reporting Standards ("MFRSs") No. 134: Interim Financial Reporting issued by the Malaysian Accounting Standards Board ("MASB"), and Paragraph 9.22 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements and should be read in conjunction with the audited financial statements of the Company and its subsidiaries ("Group") for the financial year ended 31 March 2024. These explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the financial year ended 31 March 2024.

The accounting policies and methods of computation adopted by the Group in this interim financial statements are consistent with those adopted in the financial statements for the financial year ended 31 March 2024 except for the newly-issued accounting framework - MFRS and IC Interpretations ("IC Int.") to be applied by all Entities Other Than Private Entities for the financial periods beginning on or after 1 January 2024:

Amendments to MFRS 107 and MFRS 7 Supplier Finance Arrangements

Amendments to MFRS 16 Lease Liability in a Sale and Leaseback Non-current

Amendments to MFRS 101 Classification of Liabilities as Current or Non-current

Amendments to MFRS 101 Non-current Liabilities with Covenants

Amendments to MFRS 121 Lack of Exchangeability

Amendments to MFRS 9 and MFRS7 Amendments to the Classification and Measurement of Financial Statements

MFRS 18 Presentation and Disclosure in Financial Statements

MFRS 19 Subsidiaries without Public Accountability: Disclosures

Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The adoption of the above did not have any significant effects on the interim financial statements upon their initial application.

A2 Audit report of preceding annual financial statements

The preceding audited financial statements for the financial year 31 March 2024 were not subjected to any qualification.

A3 Seasonal or cyclical factors

The business operations of the Group are not materially affected by any seasonal or cyclical factors.

A4 Unusual items affecting assets, liabilities, equity, net income or cash flows

There were no unusual items affecting assets, liabilities, equity, net income or cash flows of the Group for the current quarter under review.

A5 Material changes in estimates

There were no changes in estimates of amounts which have a material effect in the current quarter under review.

A6 Dividend paid

No dividend has been paid in the current quarter under review.

A7 Segmental information

The Group's reportable segments were identified as follows:-

Financial Services - Provision of business and technical services for financial institutions
Enterprise Solutions - Provision of emerging technologies for enterprise
Distribution Services - Distribution and maintenance of computer equipment and software
Solution Delivery - Provision of project and software solutions delivery services

Page 5 of 9

NOTES TO THE INTERIM FINANCIAL REPORT (Cont'd)
A7 Segmental information (Cont'd)

Business Segments	Financial Services		Enterprise		Distribution		Solution	Elimination	Consolidation
	Solutions		Services		Delivery

	RM'000		RM'000		RM'000		RM'000	RM'000	RM'000
3 months ended 30 June 2024
External sales	19,455	6,036	36,015	-	-	61,506
Inter-segment sales	2,615		-		441		-	(3,056)	-
Total	22,070	6,036	36,456	-	(3,056)	61,506
Results
Segment results	1,552	(4,243)	(405)	(633)	(385)	(4,114)
Interest expense	(442)	-	(461)	-	-	(903)
Interest income	41	1	35	-	-	77
Taxation	-	-	-	-	-	-

Profit / (Loss) for the financial period	1,151		(4,242)		(831)		(633)	(385)	(4,940)
Segment assets	379,086		105,035		143,701		27,631	(331,740)	323,713
Segment liabilities	275,009	95,639	130,198	18,462	(389,177)	130,131
3 months ended 30 June 2023
External sales	11,476	13,140	31,416	900	-	56,932
Inter-segment sales	1,608		150		1,468		-	(3,226)	-
Total	13,084	13,290	32,884	900	(3,226)	56,932
Results
Segment results	1,462	777	2,241	115	45	4,640
Interest expense	(157)	(89)	(337)	-	7	(576)
Interest income	59	-	56	-	-	115
Taxation	-	-	(473)	-	-	(473)

Profit / (Loss) for the financial period	1,364		688		1,487		115	52	3,706
Segment assets	234,839		113,943		89,092		26,313	(139,080)	325,107
Segment liabilities	128,573		82,433		110,613		17,151	(243,537)	95,233

A8 Valuation of property, plant and equipment

The Group did not carry out any valuation of its property, plant and equipment.

A9 Material events subsequent to the end of the quarter

On 15 March 2024, the Group proposed to undertake:

Proposed renounceable rights issue of up to 89,366,347 redeemable preference shares ("RPS") together with up to 268,099,040 free detachable warrants ("Warrants") at an issue price of RM1.00 per RPS on the basis of 1 RPS and 3 Warrants for every 12 existing ordinary shares; and
Proposed amendments to the Constitution of the Company.

Saved as disclosed above, there were no material events announced subsequent to the end of the current financial period under review up to the date of this announcement.

A10 Changes in the composition of the Group

There were no changes in the composition of the Group for the current quarter under review.

A11 Contingent liabilities

The Directors are of the opinion that the Group has no contingent liabilities which, upon crystallisation would have a material impact on the financial position and business of the Group as at 22 August 2024 (the latest practicable date which is not earlier than 7 days from the date of issue of this financial results).

A12 Cash and bank balances

	Current year
	as at
	30 June 2024
	RM'000
Cash and bank balances	10,092
Fixed deposits with licensed financial institutions	8,734
	18,826
Less: Fixed deposits pledged with licensed banks	(8,734)
Less: Bank overdraft	(2,185)
	7,907

Page 6 of 9

EXPLANATORY NOTES PURSUANT TO BURSA SECURITIES LISTING REQUIREMENTS
B1 Review of performance
The summary breakdown of revenue by business segments of the Group is as follows:-

	Individual Quarter				Cumulative Period
	3 months ended 30 June		3 months ended 30 June
	2024	2023		Variance	2024	2023		Variance
	RM'000		RM'000	%	RM'000		RM'000	%
Financial Services	22,070	13,084		69%	22,070	13,084		69%
Enterprise Solutions	6,036	13,290		-55%	6,036	13,290		-55%
Distribution Services	36,456	32,884		11%	36,456	32,884		11%
Solution Delivery	-		900		NA	-		900	NA
	64,562	60,158		7%	64,562	60,158		7%
Less : Inter Segment Revenue	(3,056)		(3,226)			(3,056)		(3,226)
Total Group Revenue	61,506		56,932		8%	61,506		56,932	8%

The Group's revenue increased by RM4.57 million in the current quarter under review as compared to the corresponding quarter of the proceeding year. The higher revenue was mainly attributable to higher order fulfilments and progress billings particularly in Distribution and Financial Services segment.

The summary breakdown of (loss) / profit before taxation by business segments of the Group is as follows:-
	Individual Quarter				Cumulative Period
	3 months ended 30 June		3 months ended 30 June
	2024	2023		Variance	2024	2023		Variance
	RM'000		RM'000	%	RM'000		RM'000	%
Financial Services	1,151	1,364		-16%	1,151	1,364		-16%
Enterprise Solutions	(4,242)	688		NA	(4,242)	688		NA
Distribution Services	(831)	1,960		NA	(831)	1,960		NA
Solution Delivery	(633)		115		NA	(633)		115	NA
	(4,555)	4,127		NA	(4,555)	4,127		NA
Add : Elimination	(385)		52			(385)		52
(Loss) / Profit before taxation ("(LBT)/PBT")	(4,940)		4,179		NA	(4,940)		4,179	NA

The Group's loss before taxation recorded during the quarter under review was mainly attributable to lower margin from the order fulfilments and progress billings as compared to the corresponding quarter in last year.

Material change in revenue and (loss) / profit before taxation for the quarter reported as compared with the immediate preceding quarter

	Current	Immediate
	Preceding	Change
	Quarter
	Quarter

	RM'000	RM'000	%
Revenue	61,506	56,932	8%
Loss before taxation	(4,940)	4,179	NA

The Group recorded increase in revenue by RM4.57 million in the current quarter as compared to the immediate preceding quarter mainly attributable to higher order fulfilments and progress billings.

The loss before taxation of RM4.94 million in the current quarter was mainly attributable to lower margin from the order fulfilments and progress billings.

Page 7 of 9

B EXPLANATORY NOTES PURSUANT TO BURSA SECURITIES LISTING REQUIREMENTS (Cont'd)

B2 Prospects

Microlink Group will concentrate its efforts on its core areas of expertise in Financial Services and Distribution segments. We anticipate year-on-year growth in both segments and are also actively looking to strengthen our foothold in Bahrain by reaching out to new international clients.

	Meanwhile, the Board will continue to pursue greater efficiency and cost savings strategies to enhance group performance.
B3	Profit forecast or guarantee
	There were no profit forecast or profit guarantee issued by the Group and the Company.
B4	Income tax expense
		Current quarter		Cumulative
		30 June 2024		30 June 2024
		RM'000		RM'000
	Taxation - current year	-	-
	Taxation - prior year	-	-
	Deferred tax	-		-
	Total	-	-
B5	Unquoted investments and properties
	There were no purchase or disposal of unquoted investments and properties during the financial period under review.
B6	Quoted securities
	There were no purchase or disposal of unquoted investments and properties during the financial period under review.
B7	Corporate exercise and utilisation of proceeds
	On 15 March 2024, the Group proposed to undertake:

Proposed renounceable rights issue of up to 89,366,347 redeemable preference shares ("RPS") together with up to 268,099,040 free detachable warrants ("Warrants") at an issue price of RM1.00 per RPS on the basis of 1 RPS and 3 Warrants for every 12 existing ordinary shares; and
Proposed amendments to the Constitution of the Company.

	Saved as disclosed above, there is no corporate exercise announced but not completed during the period under review.
B8	Group's borrowings and debt securities
	The details of the Group's bank borrowings are as follows:
		As at		As at
		30 June 2024		30 June 2023
	Current liabilities	RM'000		RM'000
	Secured:
	Short term bank borrowings - secured	51,318	24,686
	Long term bank borrowings - secured	-	2,419

	Total borrowings	51,318		27,105

Bank overdraft and trust receipts of the Group are subject to floating weighted average effective interest rates of 7.70% and 8.20%.

B9 Off balance sheet financial instruments

Bank guarantees amounting to RM8.14 million have been issued.

B10 Material litigation

The Group is not engaged in any litigation or arbitration, either as plaintiff or defendant, which has a material effect on the financial position of the Company or its subsidiary companies and the Board does not know of any proceedings pending or threatened, or of any fact likely to give rise to any proceedings, which might materially and adversely affect the position or business of the Company or its subsidiary companies as at the date of this announcement.

B11 Dividends

No dividend has been declared in respect of the current quarter under review.

Page 8 of 9

B EXPLANATORY NOTES PURSUANT TO APPENDIX BURSA SECURITIES LISTING REQUIREMENTS (Cont'd)

B12 Earnings per share

Basic earnings per share

The calculation of the basic earnings per share is based on the net profit for the financial quarter and period under review divided by the weighted average number of ordinary shares in issue during the quarter.

	Individual		Cumulative
	Quarter		Quarter
	30 June 2024		30 June 2024
Profit attributable to owners of the parent (RM)	(4,441,000)	(4,441,000)
Weighted average number of ordinary shares in issue	1,072,396,160	1,072,396,160
Basic earnings per share (sen)	(0.41)		(0.41)

B13 Authorisation for issue

The interim financial statements were authorised for issue by the Board in accordance with a resolution of the directors dated 28 May 2024.

MICROLINK SOLUTIONS BERHAD (200301018362 (620782 - P)) 29 August 2024

Page 9 of 9

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