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Si2i: No firm decision on appointment of new chairman

MAINBOARD-listed Si2i - a telecom products and IT services provider - said on Monday that the company has "not yet taken a firm decision on the appointment of a new chairman".

Si2i was responding to queries from the Securities Investors Association Singapore (Sias). Si2i, which has since 2015 been placed on the Singapore Exchange watch list for posting three straight years of losses and having a market capitalisation that fell below S$40 million, has until March 3, 2019, to get itself out of the watch list or risk delisting.

When asked by Sias about its search and nomination process for a director or chairman, Si2i said that it looks for board members through its "contacts and references".

When asked about the long-term prospects of its operator product and services distribution segment, Si2i said that "this business segment in Indonesia is steady at this time".

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Si2i added: "However, this business is subject to 'cluster renewals' by operators periodically which may occur every two to three years. This business is viable but has this risk associated with it. There is a possibility of the operators going digital as in other countries, but Indonesia being a country with subscribers spread over more than a thousand islands, suggests that the traditional cluster model may remain for some time.

"The company is aware of the risk and is in constant contact with operators to align with and explore opportunities in their future strategy."

Sias had asked what the long-term prospects of this segment were, if this was a viable long-term business given the changes in consumer behaviour, and if there was also a risk of the telcos bypassing intermediaries and going straight to the consumers.

In the same question, Sias had noted that Si2i's distribution network of more than 30,000 resellers and 150 dealers and sub-dealers has not grown in the past three years. Sias also noted that segment revenue has dropped from S$365 million in FY2014 to S$289 million in FY2017 and profit has shrunk by 70 per cent to S$1.4 million.

When asked about its ICT (infocomm technology) distribution and managed services business, Si2i said that its ICT business will continue to keep focus on the financial and public sectors and mid-market segment, in addition to more "wrap around" services as they sell hardware oriented projects.

"The company has a sound maintenance business and is also now moving to create more cloud, IoT (Internet of Things) and data centre services."

When asked how the recently-announced Grab-Uber merger will affect its battery electric vehicle (BEV) business, Si2i said that the company and Grab are working closely for a smooth transition and are hopeful of striking a balance soon.

"The Grab-Uber merger has created a temporary setback to the company in this quarter although this is not unique to the company, but also affects the entire industry. The company continues to keep sight of opportunities in other parts of Asean and Asia while continuing to focus on establishing its BEV business and looking out for other opportunities in Singapore."

Si2i said that it will continue to follow its objective of maintaining healthy capital ratios and a positive cash position in order to support its business and maximise shareholder value.

The group had surplus free cash of S$14.2 million (excluding pledged bank deposits of S$5.8 million) as at Dec 31, 2017, to support changes in working capital requirement and other group initiatives, Si2i said.

Si2i added that the group maintains surplus free cash to support changes in working capital requirements of various businesses, including one-time project orders and other initiatives of the group.

"Notwithstanding lower gearing ratio, which is a healthy sign, the group continues to be conservative on the role of debt or borrowings."