PUTRAJAYA: Prestariang Bhd does not expect the change in government to affect its 15-year concession agreement for the National Immigration Control System (Sistem Kawalan Imigresen Nasional or SKIN) project.
Today, the stock closed 13.5% or 15 sen higher at RM1.26 after losing RM260 million of its market capitalisation since the market reopened on Monday after last Wednesday’s 14th general election.
“It took us four years to get the contract, we went through the due process. It’s a national security project, it’s a must-have,” president and group CEO Abu Hassan Ismail told reporters at Prestariang’s AGM today.
He said the letter of award was received last August. Last month, it received a letter from the government declaring April 11, 2018 as the effective date of the concession agreement, after the group fulfilled all the conditions.
“More importantly, I think you’ll see the commitment of the client. They have committed as part and parcel of the overall partnership, they now have 60 people full time – Immigration officers – involved in SKIN in Cyberjaya,” he added.
Abu Hassan said the group will now focus on executing the contract and delivering on its obligations.
Last year, Prestariang’s unit Prestariang Skin Sdn Bhd (PSKIN) entered into a 15-year concession agreement with the government via the Home Affairs Ministry for the implementation of SKIN.
PSKIN was granted the right and authority by the government to undertake the planning, design, financing, development, customisation, supply, delivery, installation, configuration, integration, interfacing, testing and commissioning of SKIN as well as to carry out maintenance services.
The first three years of the 15-year concession is the development period and payment to Prestariang will begin upon commissioning of the solutions from year four to year 15 during the maintenance services period. The average annual payment is RM294.7 million.
The new border control system will replace the current Malaysian Immigration System to modernise core applications and infrastructure as well as enhance national border security.
Prestariang’s net profit doubled to RM6.51 million for the first quarter ended March 31, 2018 from RM3.22 million a year ago due to contribution from its technology division, particularly the revenue from SKIN. Revenue rose 66% to RM72.75 million from RM43.89 million a year ago.
Commenting on the outlook for the year, Abu Hassan said it expects to perform better in FY18 compared with FY17, backed by its projects and the Prestariang 5.0 transformation plan.
“We have gone through the transformation plan and we did a report card. As far as we are concerned, the first transformation plan for our technology platform is 100% achieved. The second platform, which is talent platform, is about 50% and it’s work in progress,” he said.
Abu Hassan said there is a lot of uncertainty but the group will remain focused on its operations, top line and bottom line.