Regional expansion to bode well for CTOS

PETALING JAYA: CTOS Digital Bhd continues to reap benefits from its recent expansion into Indonesia and the Philippines.

In a filing with Bursa Malaysia, the credit reporting agency said expansion into these overseas markets open significant avenues for growth.

The group said it plans to integrate its established expertise with local market insights to offer a comprehensive suite of credit centric solutions, thereby enhancing its competitive edge in the Asean market.

CTOS acquired an 80% stake in PT Prime Analytics Indonesia and a 100% stake in the Philippine-based financial technology startup FinScore last year.

For the first quarter ended March 31, 2024 (1Q24), the credit reporting agency’s net profit rose by 26% year-on-year (y-o-y) to RM20.8mil, translating to an earnings per share of 0.90 sen. This was attributable to the lower tax expense following the approval of the tax incentive of its subsidiary, CTOS Data Systems Sdn Bhd.

Meanwhile, revenue increased by 20% y-o-y to RM71.6mil in the same period.

CTOS said revenue grew from all customer groups (namely key accounts, commercial and direct-to-consumer) with higher sales of CTOS Data Systems Reports and digital solutions.

Segment profit from local operations expanded by 5% y-o-y to RM25.2mil in 1Q24.

International operations, which comprises the newly acquired alternative data credit score businesses in Indonesia and the Philippines, contributed a revenue of RM8.5mil and a segment profit of RM0.3mil for the quarter.

Overall, CTOS has a positive outlook on its growth potential for the medium to long term, underpinned by its strategic expansions and robust operational performance across all business segments.

The group stated its strategic investments will continue to focus on identifying and nurturing synergistic opportunities across Malaysia and Asean.

“Our goal is to serve a diverse client base, ranging from major banks to emerging small and medium enterprises, by providing innovative digital lending solutions.

“We are also confident in the alignment and performance of our associate companies with the expectations set forth,” it said.

The company added its key accounts segment will be primarily fuelled by the increasing adoption of its advanced digital solutions and analytical tools.

On the other hand, the commercial segment will be supported by the activation of new accounts and an uptick in the consumption of CTOS’ products and solutions.

Moreover, CTOS aims to engage with nearly 16 million credit-active consumers in the country through targeted financial literacy initiatives, digital marketing campaigns, and strategic partnerships.

Even so, the group said it recognises the presence of uncertainties in both domestic and global markets.

CTOS cautioned that the unpredictability of market dynamics remains a factor.

However, it is prepared with proactive measures to navigate potential challenges.