VCI Global Announces 145% Revenue Growth for Fiscal Year 2023 Financial Results

Rhea-AI Summary

VCI Global, a diversified holding company, reported outstanding financial results for fiscal year 2023 with a revenue growth of 145% YoY, reaching $19.8 million. The significant achievements in business strategy consultancy and technology segments led to an increase in revenue. Gross profit and net income also rose by 159% and 57%, respectively. The company showcased sustainable growth in various sectors, emphasizing its commitment to excellence and value creation for shareholders.

Positive

• Record high total revenue of $19.8 million for fiscal year 2023, marking a 145% YoY growth.

• Gross profit surged by 159% YoY, reaching $16.4 million in fiscal year 2023.

• Net income achieved remarkable growth of 57% to $7.2 million in fiscal year 2023.

• Business strategy consultancy revenue increased by 265% to $14.7 million in 2023, showcasing the potential in this sector.

• Technology development, solutions, and consultancy segment saw a 13% revenue increase to $4.5 million in fiscal year 2023.

Negative

• Depreciation expenses increased by 52% to $162 thousand in fiscal year 2023.

• Consultant fee costs surged by 464% to $2.4 million for the financial year ended December 31, 2023.

• Operating income rose significantly by 128% to $7.1 million in fiscal year 2023.

Insights

Financial Analyst

VCI Global's announcement of a 145% year-over-year revenue growth to $19.8 million is a substantial increase that signals robust expansion, particularly in the business strategy consultancy segment. The revenue surge in this segment by 265% likely reflects a successful strategy in capitalizing on IPO services, evidenced by the listing of YY Group Holding on Nasdaq. For investors, the ability to substantially grow top-line revenue often translates to enhanced shareholder value, provided that the growth is sustainable and not accompanied by proportionally high increases in costs. The reported gross profit growth of 159% and a net income increase of 57% are indicators of operational efficiency and could suggest that the company has effectively managed its expenses despite rapid expansion. The 37% EBITDA margin is particularly impressive, outpacing many industry averages and pointing to healthy earnings before interest, taxes, depreciation and amortization. Investors should note the diversification in revenue sources, with a 13% increase in technology development signaling a balanced growth approach. The reduction in IT expenses by 82% is indicative of a successful internalization of IT competencies, potentially leading to long-term cost savings. However, the increase in director fees raises questions about corporate governance and cost management, which investors should monitor for implications on future profitability.

Market Research Analyst

The strategic direction of VCI Global emphasizes a strong foothold in the consultancy and technology sectors, which are characterized by rapid growth and high scalability potential. The company's reported revenue increases demonstrate an effective penetration of these markets. VCI Global's involvement in high-profile IPO services has likely contributed to its heightened credibility and visibility in the capital market. Moreover, the shift towards in-house IT capabilities and the development of proprietary technology platforms positions the company favorably in the fintech and cybersecurity space. The financial performance indicates a keen ability to not just attract new business but also deliver results, an important indicator for long-term investment potential. For retail investors, the dividends and the capital allocation towards strategic investments, as well as the maintenance of a healthy cash position, are positive signs of a company committed to prudent financial management and shareholder return.

KUALA LUMPUR, Malaysia, April 30, 2024 (GLOBE NEWSWIRE) -- VCI Global Limited (NASDAQ: VCIG) (“VCI Global”, “VCIG”, or the “Company”), a diversified holding company focusing on consulting and technology, is proud to announce its audited financial results for the financial year ended December 31, 2023 (the “Financial Results”).

• VCI Global delivered a record high total revenue of $19.8 million for fiscal year 2023, representing a 145% YoY growth.
• Gross profit achieved significant growth of 159% YoY, reaching $16.4 million in fiscal year 2023.
• Net income reached $7.2 million in fiscal year 2023, achieved remarkable growth of 57%.
• VCI Global executed several major achievements that have led to a surge in revenue by expanding VCIG’s capital market consultancy and technology ventures.
• VCIG’s business strategy consultancy revenue surged by 265% yearly to $14.7 million in 2023, highlighting the potential of this industry.
• Additionally, VCIG demonstrates sustainable growth with a 13% revenue increase to $4.5 million in highly scalable technology development, solutions, and consultancy segment for fiscal year 2023, supported by a robust gross profit margin of 94%.

“We are excited to announce the exceptional financial performance, characterized by substantial growth in both revenue and profit. Our success underscores our steadfast commitment to excellence and the collective efforts of our dedicated team, as well as the strength of our business model and strategic initiatives on capital market consulting and technology business. As we look ahead, we remain focused on sustaining this momentum, delivering sustainable value to our shareholders, and making meaningful contributions to the communities we serve,” said Dato’ Victor Hoo, Group Executive Chairman and Chief Executive Officer of VCI Global.

FINANCIAL RESULTS

Revenue was $19.8 million for fiscal year 2023, representing an increase of 145% YoY from $8.1 million for fiscal year 2022. The increase in revenues was primarily attributable to higher demand across all of our business segments.

• VCIG’s revenue generated from business strategy consultancy fee increased by 265% to $14.7 million for fiscal year 2023, compared to $4.0 million for fiscal year 2022. The increase was primarily a result of the IPO services provided to 4 clients from Malaysia and Singapore. Notably, YY Group Holding Limited was successfully listed on the Nasdaq Capital Market on April 22, 2024, under the symbol “YYGH”. VCIG’s other clients are currently undergoing the process of going public on Nasdaq, further enhancing its reputation in this attractive market.
  
  
• The company’s revenue generated from technology development, solutions and consultancy increased by 13% to $4.5 million for fiscal year 2023, compared to $4.0 million for fiscal year 2022. This increase was primarily the result of completing two major projects: the development of a financing management system and an e-commerce platform, both provided to the Fintech industry.
  
  
• VCIG’s revenue generated from other services increased over six-fold to $0.7 million for fiscal year 2023, compared to $87 thousand for fiscal year 2022. In fiscal year 2023, the Company introduced a new service – financing service, which contributed revenue of $413 thousand.
  
  

	For the Fiscal Year Ended December 31
	2023		2022		Change
	USD		USD		%
Revenue from Business Strategy Consultancy	14,654,120		4,016,231		264.9	%
Revenue from Technology Development, Solutions and Consultancy	4,472,559		3,976,195		12.5	%
Interest Income	413,354		-		100.0	%
Others	244,715		87,047		181.1	%
Total Revenue	19,784,748		8,079,473		144.9	%

Other Income for fiscal year 2023 was $164 thousand, representing a decrease of 58%, compared to $393 thousand in fiscal year 2022.

EBITDA of $7.3 million in fiscal year 2023, reflecting a 37% margin of revenue, with a substantial increase of 125%, compared to $3.2 million in fiscal year 2022. This surge was primarily driven by heightened operating income.

Net Income for the fiscal year 2023 amounted to $7.2 million, representing a margin of revenue of 37% and a notable increase of 57%, compared to $4.6 million in fiscal year 2022.

Cost of Services was $3.4 million for the financial year ended December 31, 2023, representing a 93% increase from $1.7 million for the financial year ended December 31, 2022.

• Consultant fee costs increased by 464% to $2.4 million for the financial year ended December 31, 2023, compared to $428 thousand for the financial year ended December 31, 2022. This significant increase was primarily due to more on-going IPO projects and the increase in their consultancy fees, driven by the Company’s engagement of more professionals including legal counsel, auditors, financial consultants, and US Capital Market consultants to serve its clients. Such consultant fee payment, included and treated as part of our consultation services to our clients during the IPO process.
  
  
• IT expenses decreased by 82% to $239 thousand for the financial year ended December 31, 2023, compared to $1.3 million for the financial year ended December 31, 2022. This significant reduction resulted from the expansion of the Company’s in-house IT team and the development and direct deployment of most IT projects to customers.
  
  
• Subscription fee was $31 thousand for the financial year ended December 31, 2023, compared to $3.2 thousand for the financial year ended December 31, 2022, due to an additional subscription to a service provider which provides media monitoring, analytics and insight solutions.
  
  
• Other cost of services increased by $661 thousand from $7 thousand in fiscal year 2022 to $669 thousand in fiscal year 2023. This increase was mainly due to the referral fees paid ($552 thousand) for introducing new projects for the consulting services.
  
  

	2023		2022		Change
	USD		USD		%
Consultant Fee	2,413,237		428,122		463.7	%
IT Expenses	239,426		1,300,252		-81.6	%
Subscription Fee	30,720		3,208		857.5	%
Referral Fee	552,263		-		100.0	%
Others	116,503		7,404		1,473.4	%
Total	3,352,149		1,738,986		92.8	%

Depreciation expenses was $162 thousand in fiscal year 2023, representing an increase of 52%, compared to $106 thousand in fiscal year 2022. The increase was primarily due to additional asset acquired, including renovations for the newly leased offices and campus, as well as purchases of computer software and office equipment.

Directors’ fees increased by $1.2 million to $1.3 million for the financial year ended December 31, 2023, compared to $44 thousand for the financial year ended December 31, 2022. This increase was due to the increased in the number of Directors employed and their expanded responsibilities and duties toward the group after the successful IPO exercise on Nasdaq in April 2023.

Operating Income increased to $7.1 million in fiscal year 2023, reflecting a significant increase of 128% compared to $3.1 million in fiscal year 2022. This notable increase was primarily driven by the rise in revenue from Business Strategy Consultancy, resulting in a 265% increase due to the completion or near-completion of multiple IPO projects in fiscal year 2023. Furthermore, revenue from Technology Development, Solutions and Consultancy witnessed an increase of 13% attributed to the completion of two major projects, namely fintech solutions and e-commerce platform, alongside the addition of interest income derived from microfinancing activities.

As a result of the above, profit for the period was $7.2 million for the financial year ended December 31, 2023, compared to $4.6 million for the financial year ended December 31, 2022.

Basic and Diluted earnings per share was $0.21 for the financial year ended December 31, 2023, compared to $0.13 for the financial year ended December 31, 2022, reflecting an increase of $0.08, or 62%.

CASH POSITION AND CAPITAL ALLOCATION

Net cash generated from operating activities was $1.2 million in fiscal year 2023, a significant increase of $1.5 million, from -$0.3 million in fiscal year 2022, driven by a robust profit before tax of $7.1 million. This figure was adjusted for non-cash items and changes in operating assets and liabilities, mainly due to the increase in trade and other receivables of $0.1 million and increase in trade and other payables of $3.7 million.

Net cash used in investing activities was -$4.0 million as of December 31, 2023, significantly decreasing from $256 thousand as of December 31, 2022. This decrease was attributable to VCIG’s investment in GlobexUS Holdings Corp., YY Group Holding Limited, and Sagtec Global Limited. Additionally, VCIG acquired property and equipment totalled $0.4 million.

Net cash generated from financing activities amounted to $3 million in fiscal year 2023, representing an increase of $2.7 million from $247 thousand in fiscal year 2022. The increase is mainly due to the advance payments to related parties and dividend payment of $0.5 million and $104 thousand respectively, as well as repayment of operating lease of $82 thousand.

Cash and cash equivalents were recorded at $1.0 million as of December 31, 2023, representing a slight increase of 11 %, compared to the $0.9 million as of December 31, 2022. The amount includes cash on hand, general bank balances and cash in share trading accounts. Of the $1 million, $0.7 million is denominated in Ringgit Malaysia, while the rest is held in other currencies.

About VCI Global Limited

VCI Global is a diversified holding company. Through its subsidiaries, it focuses on consulting, fintech, AI, robotics, cybersecurity, and gamification. Based in Kuala Lumpur, Malaysia, our main operations are centered in Asia, with significant visibility across Asia Pacific, the United States, Europe, and the Middle East. VCIG primarily offers consulting services in capital markets, real estate, AI, and technology. In technology businesses, the company operates a proprietary financing platform that serves companies and individuals, as well as a secured messaging platform serving governments and organizations. We also invest, incubate, accelerate, and commercialize businesses and technologies in AI, robotics, and gamification.

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 (SEC). 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:

For media queries, please contact:

VCI Global Limited
enquiries@v-capital.co

Financial Tables

VCI Global Limited and Its Subsidiaries Consolidated Statements of Financial Position As of December 31, 2022 and 2023
	December 31, 2023			December 31, 2022
	USD			USD
ASSETS
Non-current assets
Financial assets measured at fair value through other comprehensive income	8,360,497			2,911,924
Financial assets, at fair value through profit and loss	15,861			16,421
Property and equipment	696,865			352,431
Right-of-use assets	262,337			162,213
Intangible assets	1,024,316			-
Deferred initial public offering expense	-			1,491,008
Loan receivables	4,619,070			-
Deferred tax assets	74,009			77,149
Total non-current assets	15,052,955			5,011,146
Current assets
Trade and other receivables	6,308,063			3,579,678
Loan receivables	3,350,889			-
Amount due from related parties	-			1,590
Cash and bank balances	1,010,455			907,665
Total current assets	10,669,407			4,488,933
Total assets	25,722,362			9,500,079
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables	4,223,722			2,364,184
Warrant liabilities	428,025			-
Lease liabilities	154,788			73,188
Bank and other borrowings	147,577			177,977
Income tax payable	54,739			389,959
Total current liabilities	5,008,851			3,005,308
Non-current liabilities
Lease liabilities	118,749			96,025
Bank and other borrowings	53,455			70,263
Amount due to related parties	283,346			814,684
Total non-current liabilities	455,550			980,972
Total liabilities	5,464,401			3,986,280

VCI Global Limited and Its Subsidiaries Consolidated Statements of Financial Position As of December 31, 2022 and 2023
	December 31, 2023			December 31, 2022
	USD			USD
Capital and reserves
Share capital	9,589,508			2,981,812
Capital reserve	1,423,433			1,483,830
Fair value reserve	365,389			1,458,435
Translation reserves	587,526			-
(Accumulated losses)/Retained earnings	9,183,823			(37,458	)
Attributable to equity owners of the Company	21,149,679			5,886,619
Non-controlling interests	(891,718	)		(372,816	)
Total equity	20,257,961			5,513,803
Total liabilities and equity	25,722,362			9,500,083

VCI Global Limited and Its Subsidiaries Consolidated Statements of Profit or Loss and Other Comprehensive Income/(Loss) For The Years Ended December 31, 2022 and 2023
	December 31, 2023			December 31, 2022
	USD			USD
Revenue	19,519,687			7,783,170
Revenue - related party	265,061			296,304
Total revenue	19,784,748			8,079,474
Other income	163,914			393,491
Cost of services	(3,352,149	)		(1,738,987	)
Depreciation	(161,887	)		(106,216	)
Directors’ fees	(1,289,836	)		(43,839	)
Employee benefit expense	(4,107,647	)		(2,361,216	)
Impairment allowance on trade and loan receivables	(224,260	)		(77,780	)
Rental expenses	(50,570	)		(58,431	)
Legal and professional fees	(1,386,774	)		(41,165	)
Finance cost	(20,175	)		(11,608	)
Other operating expenses	(2,252,878	)		(916,405	)
Profit before income tax	7,102,486			3,117,318
Income tax expense	135,031			1,497,100
Profit for the year	7,237,517			4,614,418
Other comprehensive income/(loss): Items that will not be reclassified subsequently to profit or loss:
Fair value adjustment on financial assets, at fair value through other comprehensive income	518,288			(4,861,359	)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operation	587,526			-
Other comprehensive income/(loss)	1,105,814			(4,861,359	)
Total comprehensive income/(loss) for the year	8,343,331			(246,941	)

VCI Global Limited and Its Subsidiaries Consolidated Statements of Profit or Loss and Other Comprehensive Income/(Loss) For The Years Ended December 31, 2022 and 2023
	December 31, 2023			December 31, 2022
Total comprehensive income/(loss) attributable to:
Equity owners of the Company	8,877,407			41,547
Non-controlling interests	(534,076	)		(288,487	)
Total	8,343,331			(246,940	)

VCI Global Limited and Its Subsidiaries Consolidated Statements of Cash Flows For The Years Ended December 31, 2022 and 2023
	December 31, 2023			December 31, 2022
	USD			USD
Operating activities
Profit before income tax	7,102,486			3,117,318
Adjustments for:
Allowance for expected credit losses on trade receivables	164,943			77,780
Allowance for expected credit losses on loan receivables	59,317			-
Impairment of goodwill on consolidation	-			-
Bad debt written off	177,410			-
Share-based compensation awards	970,024			-
Preliminary expense written off	-			-
Property and equipment written off	-			3
Depreciation of property and equipment	69,315			52,145
Depreciation of right-of-use assets	92,571			54,071
Gain on disposal of financial assets, at fair value through profit and loss	-			(350,301	)
Gain on disposal of property and equipment	-			(1,477	)
Loss on disposal of property and equipment	-			6,648
Interest expense	19,787			11,432
Interest income	(1,596	)		(11	)
Operating cash flows before movements in working capital	8,654,257			2,967,608
Trade and other receivables	(3,119,228	)		(3,251,783	)
Loan receivables	(8,029,277	)		-
Trade and other payables	3,829,793			157,905
Contract liabilities	-			(113,572	)
Deferred revenue	-			(70,487	)
Cash generated from/(used in) operations	1,335,545			(310,329	)
Income tax (paid)/refund	(184,317	)		5,226
Net cash from/(used in) operating activities	1,151,228			(305,103	)
Investing activities
Acquisition of property and equipment	(433,922	)		(379,092	)
Proceeds from disposal of property and equipment	-			3,988
Acquisition of intangible assets	(24,316	)		-
Interest received	1,596			11
Acquisition of financial assets, at fair value through other comprehensive income	(9,494,041	)		-
Proceeds from disposal of financial assets, at fair value through other comprehensive income	5,975,424			-
Proceeds from disposal of financial assets, at fair value through profit and loss	-			633,560
Purchase of financial assets, at fair value through profit and loss	-			(2,319	)
Acquisition of subsidiaries	-			-
Net cash (used in)/from investing activities	(3,975,259	)		256,148

VCI Global Limited and Its Subsidiaries Consolidated Statements of Cash Flows For The Years Ended December 31, 2022 and 2023
	For the Year Ended December 31, 2023			For the Year Ended December 31, 2022
	USD			USD
Financing activities
Proceeds from issuance of shares	-			2,931,840
Repayment of other borrowings	(10,829	)		(4,295	)
Proceeds from bank borrowings	-			-
Repayment of bank borrowings	(26,273	)		(22,535	)
Interest paid	(19,787	)		(11,432	)
Proceeds from initial public offering	3,804,044			-
Payment for deferred initial public expense	(99,535	)		(131,158	)
Repayment of operating leases	(81,867	)		(47,071	)
Advances made to related parties	(498,178	)		(2,468,087	)
Dividend paid	(103,809	)		-
Contribution from non-controlling interests	-			-
Net cash (used in)/from financing activities	2,963,766			247,262
Net increase in cash and cash equivalents	139,735			198,307
Cash and bank balances at beginning of year	870,720			709,358
Cash and bank balances at end of year	1,010,455			907,665
NON-CASH FINANCING ACTIVITIES:
Constructive dividends paid	-			1,569,336