VCIG VCI Global Ltd

VCI Global Limited (NASDAQ:VCIG) ("VCI Global" or "the Company"), a multi-disciplinary consulting group focusing on business and technology, today announced its unaudited financial results for the six months ended June 30, 2023 (the “Interim Results”) (the “Announcement”).

Dato' Victor Hoo, Group Executive Chairman and Chief Executive Officer of VCI Global, commented: “We are very pleased with our results and progress now that we are a publicly traded company. As we will illuminate on this call, VCI Global demonstrated strong growth in our business strategy consultancy and technology solutions segments and we are optimistic regarding the remainder of 2023 and beyond”.

FINANCIAL RESULTS

Revenue was RM44.5 million ($9.5 million) for the six months ended June 30, 2023, representing an increase of 108.0% YoY from RM21.4 million ($4.8 million) for the six months ended June 30, 2022. The increase in revenues was primarily attributable to higher demand across all of our business segments.

• Revenue generated from business strategy consultancy fee increased by 83.0% to RM20.8 million ($4.5 million) for the six months ended June 30, 2023, compared to RM11.4 million ($2.6 million) for the six months ended June 30, 2022. The increase was primarily a result of the IPO services provided to the 4 clients from Malaysia and Singapore who are currently undergoing the process of going public on Nasdaq, which enhanced our reputation in this attractive market.
• Revenue generated from technology development, solutions and consultancy increased by 104.3% to RM19.7 million ($4.2 million) for the six months ended June 30, 2023, compared to RM9.7 million ($2.2 million) for the six months ended June 30, 2022. The increase was primarily a result from the development on financing management system and e-commerce platform which we provided to the Fintech industry.
• Revenue generated from other services increased ten-fold to RM3.9 million ($0.8 million) for the six months ended June 30, 2023, compared to RM357 thousand ($81 thousand) for the six months ended June 30, 2022. For the six months ended June 30, 2023, the Company added a new service – financing service which contributed revenue of RM1.1 million ($240 thousand).

		Six months endedJune 30,2023					Six months endedJune 30,2022		Change
		RM		USD			RM		%
Business strategy consultancy fee		20,789,179		4,453,647			11,359,388		83.0
Technology Development, Solutions and Consultancy		19,733,018		4,227,387			9,657,906		104.3
Interest income		1,118,641		239,645			-		100.0
Others		2,822,357		604,631			357,338		689.83
Total revenue		44,463,195		9,525,310			21,374,632		108.0

Other Income was RM1.1 million ($226 thousand) for the six months ended June 30, 2023, compared to RM110 thousand ($25 thousand) for the six months ended June 30, 2022.

EBITDA of $4.49 million, or 47.2% of revenues, compared to $3.19 million, or 66% of revenues, for the six months ended June 30, 2022. The increase in EBITDA for the six months ended June 30, 2023 was primarily attributable to the increase in our operating income.

Net Income for the six months ended June 30, 2023 is $4.3 million, representing 37.6% increased from $3.1 million for the six months ended June 30, 2022.

Cost of Services was RM6.0 million ($1.3 million) for the six months ended June 30, 2023, representing an increase of 172.9% YoY from RM2.2 million ($503 thousand) for the six months ended June 30, 2022.

• Consultant fee costs increased by 829.3% to RM5.7 million ($1.2 million) for the six months ended June 30, 2023, compared to RM611 thousand ($139 thousand) for the six months ended June 30, 2022. The increase in consultant fee cost was in line with the increase in business consultancy revenue as the Company engages with more professionals to serve its clients. The gross profit margin of consultant income in term of consultant fee was 72.7% for the six months ended June 30, 2023 compared to 94.6% for the six months ended June 30, 2022.
• IT expenses were RM181 thousand ($39 thousand) for the six months ended June 30, 2023, compared to RM1.5 million ($340 thousand) for the six months ended June 30, 2022. The gross profit margin for Technology Development, Solutions and Consultancy revenue and IT expenses costs were 99.1% for the six months ended June 30, 2023, compared to 84.5% for the six months ended June 30, 2022.
• Training costs were RM192 thousand ($41 thousand) for the six months ended June 30, 2023, compared to NIL for the six months ended June 30, 2022.
• Other cost of services was NIL for the six months ended June 30, 2023, compared to RM110 thousand ($25 thousand) for the six months ended June 30, 2022.

		Six months ended June 30, 2023				Six months ended June 30, 2022			Change
		RM		USD		RM			%
Consultant fee		5,676,167		1,216,000		610,797			829.30
IT expenses		180,669		38,705		1,495,966			(87.92	)
Training costs		192,398		41,217		-			N.A.
Others		-		-		110,166			N.A.
Total		6,049,234		1,295,922		2,216,929			172.87

Depreciation was RM274 thousand ($59 thousand) for the six months ended June 30, 2023, compared to RM11.2 thousand ($2.5 thousand) for the six months ended June 30, 2022. The increase was primarily due to additional assets acquired, such as new computer and accessories purchased for the Company’s employees who joined during the first half of the year 2023.

Directors’ fees increased to RM5.4 million ($1.2 million) for the six months ended June 2023, compared to RM141 thousand ($32 thousand) for the six months ended June 30, 2022, as the Company started to pay fixed director fees to its Board of Directors in VCI Global Limited after successfully listing on Nasdaq in April 2023.

Operating Income increased by RM6.6 million ($1.4 million) for the six months ended June 30, 2023, compared to RM14 million ($3 million) for the six months ended June 20,2022 mainly due to other operating expense which comprise of increase of marketing expenses by RM759 thousand ($163 thousand) to reach out to more customers and create brand awareness, increase of office expenses by RM575 thousand ($123 thousand) as bigger offices require higher maintenance and cleaning, and increase of legal and professional fees included audit fees and legal compliance fees by RM1.4 million ($290 thousand) after initial public offering.

As a result of the above, profit for the period was RM20 million ($4.3 million) for the six months ended June 30, 2023, compared to RM13.8 million ($3.1 million) for the six months ended June 30, 2022.

Basic and Diluted earnings per share was RM0.55 ($0.12) for the six months ended June 30, 2023, compared to RM0.40 ($0.09) for the six months ended June 30, 2022.

CASH POSITION AND CAPITAL ALLOCATION

Net cash used in operating activities was RM17.2 million ($3.7 million) for the six months ended June 30, 2023, compared to RM642 thousand ($146 thousand) for the six months ended June 30, 2022. The increase in net cash used in operating activities is primarily due to an increase in the use of cash of RM40 million related to trade and other receivables. These increases in cash used in operating activities were offset in part by an increase of RM780 thousand in the gain of disposal of investment.

Net cash generated by investing activities was RM13 million ($2.8 million) for the six months ended June 30, 2023, compared to RM178 thousand ($40 thousand) used in investing activities for the six months ended June 30, 2022. Cash generated by investing activities was mainly due to the proceeds from disposal of investment in Treasure Global Inc.

Net cash generated from financing activities was RM15.6 million ($3.3 million) for the six months ended June 30, 2023, compared to RM589 thousand ($134 thousand) used in financing activities for the six months ended June 30, 2022. Cash provided by financing activities for the six months ended June 30, 2023 was primarily related to RM17.5 million ($3.7 million) in proceeds from issuance of share capital.

Cash and cash equivalents was RM15 million ($3.3 million) as of June 30, 2023, compared to RM4 million as of June 30, 2022.

H1 2023 Results Conference Call and Replay Information

VCI Global will discuss its first half results for the period ended June 30, 2023 in its conference call on October 4, 2023, at 8:30 am ET and 8:30 pm Malaysia Time. A simultaneous live webcast of the call will be available on the company's Investor Relations website at https://ir.v-capital.co/press_release/.

What: Date of VCI Global 1H 2023 Financial Results and Q&A WebcastWhen: Wednesday, October 4, 2023Time: 8:30 a.m. Eastern Time / 8:30 p.m. Malaysia TimeWebcast: Conference call registration link: https://register.vevent.com/register/BI32821ec0a11c4c70ad83caf1a61b071d

Approximately 24 hours after the Q&A session, an archived version of the webcast will be available on the Company's website for approximately two weeks thereafter.

Investor Presentation and Supplemental Financial Information

VCI Global has made available on its website a presentation designed to accompany the discussion of VCIG’s results and future outlook, along with certain supplemental financial information and other data. Interested parties may access this information through the VCI Global Investor Relations website at (insert link)

About VCI Global Limited

VCI Global is a multi-disciplinary consulting group with key advisory practices in the areas of business and technology. The Company provides business and boardroom strategy services, investor relation services, and technology consultancy services. Its clients range from small-medium enterprises and government-linked agencies to publicly traded companies across a broad array of industries. VCI Global operates solely in Malaysia, with clients predominantly from Malaysia, but also serves some clients from China, Singapore, and the US.

For more information on the Company, please log on to https://v-capital.co/.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the Company's ability to grow its business and other statements that are not historical facts, including statements which may be accompanied by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential" or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including without limitation, the Company's ability to achieve profitable operations, customer acceptance of new products, the effects of the spread of Coronavirus (COVID-19) and future measures taken by authorities in the countries wherein the Company has supply chain partners, the demand for the Company's products and the Company's customers' economic condition, the impact of competitive products and pricing, successfully managing and, general economic conditions and other risk factors detailed in the Company's filings with the United States Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake any responsibility to update the forward-looking statements in this release, except in accordance with applicable law.

CONTACT INFORMATION:

Issued by ICR Imej Jiwa Communications Sdn Bhd on behalf of VCI Global Limited

For media queries, please contact:

Imej Jiwa Communications Sdn Bhd

Chris Chuah

Email: chris@imejjiwa.com

Investor Relations

Michael BowenEmail: Vciglobal.IR@icrinc.com

Financial Tables

Interim condensed consolidated statements of financial position

	As of June 30, 2023 (Unaudited)								As ofDecember 31,2022(Audited)
	RM				USD				RM
ASSETS
Non-current assets
Financial assets measured at fair value through other comprehensive income		7,002,234				1,500,082				12,819,747
Financial assets measured at fair value through profit and loss		76,044				16,291				72,295
Property and equipment		2,081,771				445,976				1,551,579
Right-of-use of assets		555,445				118,992				714,143
Deferred initial public offering expense		-				-				6,564,162
Deferred tax assets		339,650				72,763				339,650
Total non-current assets		10,055,144				2,154,104				22,061,576
Current assets
Trade and other receivables		55,983,342				11,993,261				15,759,533
Amount due from related parties		-				-				7,000
Cash and bank balances		15,328,861				3,283,888				3,995,995
Total current assets		71,312,203				15,277,149				19,762,528
Total assets		81,367,347				17,431,253				41,824,104
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		6,395,343				1,370,068				10,408,318
Bank and other borrowings		682,410				146,192				783,542
Lease liabilities		162,837				34,884				322,208
Income tax payable		1,833,795				392,852				1,716,794
Total current liabilities		9,074,385				1,943,996				13,230,862
Non-current liabilities
Bank and other borrowings		309,331				66,268				309,331
Lease liabilities		422,751				90,566				422,751
Amount due to related parties		2,017,705				432,251				3,586,646
Total non-current liabilities		2,749,787				589,085				4,318,728
Total liabilities		11,824,172				2,533,081				17,549,590
Capital and reserves
Share capital		37,069,050				7,941,269				13,127,427
Capital reserve		6,532,560				1,399,465				6,532,560
Currency translation reserve		1,272,834				272,678				-
Retained earnings		27,459,238				5,882,566				6,255,851
Attributable to equity owners of the Company		72,333,682				15,495,978				25,915,838
Non-controlling interests		(2,790,507	)			(597,806	)			(1,641,324	)
Total equity		69,543,175				14,898,172				24,274,514
Total equity and liabilities		81,367,347				17,431,253				41,824,104

Interim condensed consolidated statements of comprehensive income (unaudited)

	Six months endedJune 30, 2023							Six monthsended June 30,2022
	RM				USD			RM
Revenue		44,463,195			9,525,310			15,931,394
Revenue – related party		-			-			5,443,238
Total revenue		44,463,195			9,525,310			21,374,632
Other income		1,054,906			225,992			109,802
Fair value adjustment on financial assets measured at fair value through profit and loss		-			-			1,679,842
Cost of services		(6,049,234	)		(1,295,922	)		(2,216,929	)
Depreciation		(274,425	)		(58,790	)		(11,203	)
Directors’ fees		(5,435,664	)		(1,164,477	)		(141,000	)
Employee benefits expenses		(7,770,225	)		(1,664,608	)		(4,807,371	)
Impairment allowance on trade receivables		-			-			(183,546	)
Rental expenses		(149,951	)		(32,124	)		(156,673	)
Legal and professional fees		(1,473,823	)		(315,736	)		(117,377	)
Finance cost		(15,875	)		(3,401	)		(8,685	)
Other operating expenses		(3,668,557	)		(785,912	)		(1,474,666	)
Profit before income tax		20,680,347			4,430,332			14,046,826
Income tax expense		(626,143	)		(134,138	)		(283,648	)
Profit for the period		20,054,204			4,296,194			13,763,178
Other comprehensive income (loss):
Exchange differences on translating foreign operations		1,272,834			272,678			-
Fair value adjustment on financial assets measured at fair value through other comprehensive income		-			-			(4,199,770	)
Total comprehensive income for the period		21,327,038			4,568,872			9,563,408
Profit attributable to:
Equity owners of the Company		21,203,387			4,542,382			13,568,156
Non-controlling interests		(1,149,183	)		(246,188	)		195,022
Total		20,054,204			4,296,194			13,763,178
Total comprehensive income attributable to:
Equity owners of the Company		22,476,221			4,815,060			9,368,386
Non-controlling interests		(1,149,183	)		(246,188	)		195,022
		21,327,038			4,568,872			9,563,408

Interim condensed consolidated statements of cash flows (unaudited)

	Six months endedJune 30, 2023							Six monthsendedJune 30,2022
	RM				USD			RM
Operating activities
Profit before income tax		20,680,347			4,430,332			14,046,826
Adjustments for:
Impairment allowance on trade receivable		-			-			183,546
Unrealized foreign exchange loss		805,197			172,498			-
Depreciation of property and equipment		115,727			24,792			11,203
Depreciation of right-of-use of assets		158,698			33,998			-
Fair value adjustment on financial assets measured at fair value through profit and loss		-			-			(1,679,842	)
Gain on disposal of investment		(780,319	)		(167,167	)		-
Gain on disposal of property and equipment		-			-			(1,891	)
Interest expense		15,875			3,401			8,685
Interest income		(942	)		(202	)		(22	)
Operating cash flow before movement in working capital		20,994,583			4,497,652			12,568,505
Trade and other receivables		(40,216,809	)		(8,615,611	)		(8,629,924	)
Trade and other payables		2,551,187			546,538			(4,804,822	)
Cash used in operations		(16,671,039	)		(3,571,421	)		(866,241	)
Interest received		-			-			22
Income tax paid		(509,142	)		(109,073	)		224,626
Net cash used in operating activities		(17,180,181	)		(3,680,494	)		(641,593	)
Investing activities
Purchase of property and equipment		(645,919	)		(138,375	)		(33,896	)
Proceeds from disposal of property and equipment		-			-			11,706
Interest paid		-			-			-
Interest received		942			202			-
Acquisition of financial assets measured at fair value through profit and loss		-			-			(156,120	)
Proceeds from disposal of financial assets measured at fair value through other comprehensive income		13,600,066			2,913,530			-
Net cash generated from / (used in) investing activities		12,955,089			2,775,357			(178,310	)
Financing activities
Proceeds from issuance of shares		-			-			2,615,477
Proceeds from initial public offering, net of issuance costs		17,457,899			3,739,990			-
Interest paid		(15,875	)		(3,401	)		-
Repayments of other borrowings		(101,132	)		(21,665	)		(54,781	)
Repayment of advances to related parties		(1,568,941	)		(336,113	)		(3,149,847	)
Repayment of operating leases		(159,371	)		(34,142	)		-
Net cash generated from / (used in) financing activities		15,612,580			3,344,669			(589,151	)
Net increase / (decrease) in cash and cash equivalents		11,387,488			2,439,532			(1,409,054	)
Effect of currency translation on cash and cash equivalents		(54,622	)		(11,702	)		-
Cash and bank balances at beginning of the period		3,995,995			856,058			3,122,947
Cash and bank balances at end of the period		15,328,861			3,283,888			1,713,893