VCI Global Announces 44% Revenue Growth in Its Financial Results for the Six Months Ended June 30, 2024; Announces US$10 Million Share Repurchase Program Over 2 Years

Rhea-AI Summary

VCI Global (NASDAQ: VCIG) reported strong financial results for H1 2024:

• Revenue grew 44% YoY to $13.7 million
• Gross profit increased 57% YoY to $12.9 million
• Net income rose 25% to $5.4 million
• Business strategy consultancy revenue surged 151% to $11.2 million
• Fintech segment revenue grew 183% to $0.7 million

The company also announced a $10 million share repurchase program over 2 years. VCIG's CEO attributed the performance to strategic initiatives and market positioning. The company aims to leverage its expertise for continued growth and client value delivery.

Positive

• 44% year-over-year revenue growth to $13.7 million in H1 2024
• 57% increase in gross profit to $12.9 million
• 25% growth in net income to $5.4 million
• 151% surge in business strategy consultancy revenue to $11.2 million
• 183% growth in fintech segment revenue to $0.7 million
• Announcement of $10 million share repurchase program over 2 years
• Gross profit margin for business strategy consultancy improved from 73% to 93%
• EBITDA increased 26% to $5.7 million with 41% margin on revenue

Negative

• Net cash used in operating activities increased to $4.1 million from $3.7 million
• Cash and cash equivalents decreased 62% to $1.2 million
• Net cash used in investing activities increased significantly to $4.6 million
• Technology development, solutions and consultancy revenue decreased 58.6%
• Other income decreased 54% to $104 thousand

Insights

Financial Analyst

VCI Global's financial results demonstrate strong growth across key metrics. The 44% YoY revenue increase to $13.7 million and 57% gross profit growth to $12.9 million are particularly impressive. The business strategy consultancy segment's 151% revenue surge to $11.2 million indicates successful market positioning.

However, the decrease in cash position from $3.3 million to $1.2 million is concerning, despite management's confidence in future liquidity. The $30.1 million in outstanding receivables presents both a risk and opportunity, depending on collection efficiency. The $10 million share repurchase program signals management's confidence but could impact cash reserves.

Market Research Analyst

VCI Global's diversification strategy appears to be paying off, with significant growth in both consultancy and fintech segments. The 183% YoY growth in fintech revenue suggests strong market demand for their offerings. However, the 58.6% decline in technology development, solutions and consultancy revenue raises questions about this segment's performance and market positioning.

The company's focus on high-margin services is evident from the 93% gross profit margin in business strategy consultancy. This positions them well in a competitive market. The share repurchase program may boost investor confidence, but its impact on growth investments should be monitored closely.

Corporate Governance Expert

The 94% increase in directors' fees to $2.3 million is significant and warrants scrutiny. While partially explained by the full six-month payment period versus three months in the previous year, the magnitude of increase deserves shareholder attention. The $1.3 million share-based payment for director fees further adds to this concern.

The implementation of a share repurchase program demonstrates confidence but also raises questions about capital allocation priorities. Shareholders should closely monitor how this balances against investments in growth and the company's ability to maintain sufficient liquidity, especially given the current cash position and receivables situation.

KUALA LUMPUR, Malaysia, Aug. 19, 2024 (GLOBE NEWSWIRE) -- VCI Global Limited (NASDAQ: VCIG) (Frankfurt: H0T) (“VCI Global,” “VCIG,” or the “Company”), a diversified holding company specializing in consulting, fintech, artificial intelligence (AI), robotics and cybersecurity, is proud to announce its unaudited financial results for the six months ended June 30, 2024 (the “Interim Results”) (the “Financial Results”).

Financial Highlights

• VCI Global achieved an impressive total revenue of $13.7 million for the six months ended June 30, 2024, marking a 44% YoY growth.
• Gross profit experienced a substantial YoY growth of 57%, reaching $12.9 million for the six months ended June 30, 2024.
• Net income surged to $5.4 million for the six months ended June 30, 2024, reflecting a remarkable growth of 25%.
• VCIG’s business strategy consultancy revenue experienced a remarkable 151% YoY surge, reaching $11.2 million for the six months ended June 30, 2024.
• VCIG’s fintech segment revenue experienced an impressive 183% YoY growth, reaching $0.7 million for the six months ended June 30, 2024.
  

Authorization of a Share Repurchase Program

VCIG’s Board of Directors has authorized the implementation of a share repurchase program for up to US$10 million of the Company’s outstanding ordinary shares over the next two years (the “Repurchase Program”). Under the Repurchase Program, VCIG may repurchase for cash, from time to time, its ordinary shares through open market purchases pursuant to a Rule 10b-18 plan, in compliance with applicable securities laws and other legal requirements.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, through negotiated transactions off the market, in block trades, or through other legally permissible means. The timing and extent of any repurchases will be influenced by market conditions, the trading price of its ordinary share, and other factors. These repurchases will also adhere to restrictions relating to volume, price, and timing under applicable law. VCI Global expects to implement this Repurchase Program in a manner consistent with market conditions and the interests of the Company’s shareholders. VCIG’s Board of Directors will review the Repurchase Program periodically and may authorize adjustments to its terms and size accordingly.

“Our outstanding performance for the six months ended 2024 is a testament to the exceptional efforts and dedication of our team. We have successfully advanced our strategic initiatives and strengthened our position in the market. Looking ahead, we remain committed to leveraging our expertise to drive continued growth and deliver unparalleled value to our clients. Our focus remains on innovation and excellence, and we are excited about the opportunities that lie ahead as we build on this momentum for future success,” said Dato’ Victor Hoo, Group Executive Chairman and Chief Executive Officer of VCI Global.

Financial Results

Revenue was $13.7 million for the six months ended June 30, 2024, representing a 44% YoY increase from $9.5 million for the six months ended June 30, 2023. This increase in revenue was primarily attributable to our ability to offer market-leading services that add value to clients through our business strategy consultancy service offerings and solutions.

• VCIG’s revenue generated from business strategy consultancy segment increased by 151% to $11.2 million for the six months ended June 30, 2024, compared to $4.5 million for the six months ended June 30, 2023. The gross profit margin of the business strategy consultancy revenue was 93% for the six months ended June 30, 2024, compared to 73% for the six months ended June 30, 2023.
  
• The Company’s revenue generated from fintech segment increased by 183% to $0.7 million for the six months ended June 30, 2024, compared to $0.2 million for the six months ended June 30, 2023.
  
  

	For the Six Months Ended June 30
	2024			2023		Change
	USD			USD		%
Business strategy consultancy fee	11,160,748			4,453,647		150.6	%
Technology development, solutions and consultancy	1,748,959			4,227,387		(58.6	)%
Interest income	677,086			239,645		182.5	%
Others	139,908			604,631		(76.9	)%
Total revenue	13,726,701			9,525,310		44.1	%

Other Income for the six months ended June 30, 2024, was $104 thousand, reflecting a decrease of 54% compared to $226 thousand for the six months ended June 30, 2023.

EBITDA reached $5.7 million for the six months ended June 30, 2024, reflecting a 41% margin on revenue and a notable increase of 26%, compared to $4.5 million for the six months ended June 30, 2023. This surge was primarily driven by a rise in operating income.

Net Income amounted to $5.4 million for the six months ended June 30, 2024, reflecting a 39% margin on revenue and a significant 25% increase from $4.3 million for the six months ended June 30, 2023.

Cost of Services was $844 thousand for the six months ended June 30, 2024, representing a significant decrease of 35% from $1.3 million for the six months ended June 30, 2023.

• Consultant fee costs significantly decreased by $481 thousand, or 40%, to $735 thousand for the six months ended June 30, 2024. These costs represent the expenses incurred by the Company for assisting its clients in engaging all the relevant professionals required during the listing process, including but not limited to legal counsel, auditors, financial consultants, and U.S. capital markets consultants. Such consultant fee payments are included and treated as part of our consultation services for clients during the IPO process.
  
• IT expenses amounted to $9 thousand for the six months ended June 30, 2024, reflecting a significant decrease of 77% compared to $39 thousand for the six months ended June 30, 2023. The gross profit margin of the technology development, solutions and consultancy revenue was 99.5% for the six months ended June 30, 2024.
  
• Training costs amounted to $10 thousand for the six months ended June 30, 2024, reflecting a 76% decrease compared to $41 thousand for the six months ended June 30, 2023.
  
• Other cost of services amounted to $90 thousand for the six months ended June 30, 2024.
  
  

	For the Six Months Ended June 30
	2024		2023		Change
	USD		USD		%
Consultant fee	734,589		1,216,000		(39.6	)%
IT expenses	8,904		38,705		(77.0	)%
Training costs	10,098		41,217		(75.5	)%
Other	90,461		-		100.0	%
Total	844,052		1,295,922		(34.9	)%

Depreciation expenses amounted to $108 thousand for the six months ended June 30, 2024, reflecting an 84% increase from $59 thousand for the six months ended June 30, 2023. The increase was primarily due to acquisition of additional assets, such as new computers and accessories purchased for our newly joined employees during the first half of 2024.

Directors’ fees amounted to $2.3 million for the six months ended June 30, 2024, representing a 94% growth, compared to $1.2 million for the six months ended June 30, 2023. This increase was due to the rise in directors’ fees effective from January 2024. Additionally, in the prior period, the Company only began paying directors’ fees to the Board of Directors starting from April 2023, upon the Company’s listing on Nasdaq.

Operating Income increased to $5.6 million for the six months ended June 30, 2024, reflecting a remarkable increase of 26% compared to $4.4 million for the six months ended June 30, 2023.

As a result, profit for the period was $5.4 million for the six months ended June 30, 2024, marking a strong 25% increase compared to $4.3 million for the six months ended June 30, 2023.

Cash Position and Capital Allocation

Net cash used in operating activities was $4.1 million for the six months ended June 30, 2024, a slight increase of $0.5 million, from $3.7 million for the six months ended June 30, 2023. This figure consists of our profit before tax of $5.6 million and was adjusted for non-cash items, including $1.3 million for share-based payment for director fee, and the changes in operating assets and liabilities were $11.4 million of increase in trade and other receivables and $348 thousand of increase in trade and other payables.

Net cash used in investing activities was $4.6 million for the first six months ended June 30, 2024, significantly increase as compared to $2.8 million generated from the six months ended June 30, 2023. Cash used in or generated from investing activities was mainly due to a $5.7 million investment in Fintech Scion Limited as part of our professional fees and $1.9 million from the disposal of our shares in YY Group Holding Limited.

Net cash generated from financing activities amounted to $8.6 million for the six months ended June 30, 2024, representing an increase of $5.2 million from $3.3 million for the six months ended June 30, 2023. This increase was mainly due to $8.8 million in proceeds from the At-The-Market Offering (ATM), private placements, warrant exercises, and follow-on public offerings.

Cash and cash equivalents amounted to $1.2 million for the six months ended June 30, 2024, representing a decrease of 62%, compared to $3.3 million for the six months ended June 30, 2023. The Company believes this amount, along with planned actions, will be sufficient to fund operations for at least the next 12 months. To improve liquidity, the Company plans to enhance the collection of outstanding receivables totaling $30.1 million as of June 30, 2024, and reduce general and administrative expenses.

About VCI Global Limited

VCI Global is a diversified holding company. Through its subsidiaries, it focuses on consulting, fintech, AI, robotics, and cybersecurity. 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 and robotics.

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. These forward-looking statements are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, activities of regulators, future regulations, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Therefore, you should not rely on any of these forward-looking statements. 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 “Risk Factors” section of the Annual Report on 20-F of the Company for the year ended December 31, 2023, filed with the United States Securities and Exchange Commission (“SEC”) on April 30, 2024, and its subsequent SEC filings. 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 Interim Condensed Consolidated Statements of Financial Position
	As of June 30, 2024 (Unaudited)		As of December 31, 2023 (Audited)
	USD		USD
ASSETS
Non-current assets
Financial assets measured at fair value through other comprehensive income	9,407,260		8,360,497
Financial assets measured at fair value through profit and loss	15,814		15,861
Property and equipment	798,309		696,865
Right-of-use of assets	184,790		262,337
Intangible assets	1,661,734		1,024,316
Loan receivables	8,318,386		4,619,070
Deferred tax assets	72,002		74,009
Total non-current assets	20,458,295		15,052,955
Current assets
Trade and other receivables	30,105,568		6,308,063
Loan receivables	4,990,001		3,350,889
Cash and bank balances	1,244,958		1,010,455
Income tax asset	-		-
Total current assets	36,340,527		10,669,407
Total assets	56,798,822		25,722,362
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables	4,457,488		4,223,722
Warrant liabilities	1,614,286		428,025
Lease liabilities	135,395		154,788
Bank and other borrowings	150,031		147,577
Income tax payable	149,701		54,739
Total current liabilities	6,506,901		5,008,851
Non-current liabilities
Lease liabilities	56,250		118,749
Bank and other borrowings	36,132		53,455
Amount due to related parties	-		283,346
Total non-current liabilities	92,382		455,550
Total liabilities	6,599,283		5,464,401

VCI Global Limited and Its Subsidiaries Interim Condensed Consolidated Statements of Financial Position (Unaudited)
	As of June 30, 2024 (Unaudited)			As of December 31, 2023 (Audited)
	USD			USD
Capital and reserves
Share capital	36,374,551			9,589,508
Capital reserve	1,384,838			1,423,433
Fair value reserve	(1,132,440	)		365,389
Translation reserve	1,163,566			587,526
Retained earnings	13,674,424			9,183,823
Attributable to equity owners of the Company	51,464,939			21,149,679
Non-controlling interests	(1,265,400	)		(891,718	)
Total equity	50,199,539			20,257,961
Total equity and liabilities	56,798,822			25,722,362

VCI Global Limited and Its Subsidiaries Interim Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	Six months ended June 30, 2024			Six months ended June 30, 2023
	USD			USD
Revenue	13,033,862			9,525,310
Revenue – related party	692,839			-
Total revenue	13,726,701			9,525,310
Other income	104,172			225,992
Cost of services	(844,052	)		(1,295,922	)
Depreciation	(108,235	)		(58,790	)
Directors’ fees	(2,262,483	)		(1,164,477	)
Employee benefits expenses	(1,633,475	)		(1,664,608	)
Impairment allowance on trade receivables	(78,110	)		-
Rental expenses	(57,059	)		(32,124	)
Legal and professional fees	(748,571	)		(315,736	)
Finance cost	(6,102	)		(3,401	)
Other operating expenses	(2,530,143	)		(785,912	)
Profit before income tax	5,562,643			4,430,332
Income tax expense	(175,189	)		(134,138	)
Profit for the period	5,387,454			4,296,194
Other comprehensive income/(loss):
Currency translation arising from consolidation	-			272,678
Fair value adjustment on financial assets measured at fair value through other comprehensive income	(1,173,700	)		-
Transfer upon disposal of equity instruments	(1,487,922	)		-
Total comprehensive income for the period	2,725,832			4,568,872
Profit attributable to:
Equity owners of the Company	5,916,519			4,542,382
Non-controlling interests	(529,065	)		(246,188	)
Total	5,387,454			4,296,194
Total comprehensive income attributable to:
Equity owners of the Company	3,254,897			4,815,060
Non-controlling interests	(529,065	)		(246,188	)
Total	2,725,832			4,568,872

VCI Global Limited and Its Subsidiaries Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
	Six months ended June 30, 2024			Six months ended June 30, 2023
	USD			USD
Operating activities
Profit before income tax	5,562,643			4,430,332
Adjustments for:
Impairment allowance of trade receivables	78,110			-
Reversal on impairment allowance of trade receivable	(13,649	)		-
Bad debt written-off	189			-
Unrealised foreign exchange (gain)/loss	(20,182	)		172,498
Depreciation of property and equipment	37,802			24,792
Depreciation of ROU	70,433			33,998
Share based payment – Director fees	1,265,377			-
Gain on disposal of investment	-			(167,167	)
Interest expense	6,102			3,401
Interest income	(799	)		(202	)
Operating cash flow before movement in working capital	6,986,026			4,497,652
Trade and other receivables	(5,758,606	)		(8,615,611	)
Loan receivables	(5,632,631	)		-
Trade and other payables	348,285			546,538
Cash used in operations	(4,056,926	)		(3,571,421	)
Interest received	-			-
Income tax paid	(78,742	)		(109,073	)
Net cash used in operating activities	(4,135,668	)		(3,680,494	)
Investing activities
Purchase of property and equipment	(158,289	)		(138,375	)
Purchase of intangible assets	(665,191	)		-
Interest received	799			202
Acquisition of financial assets measured at fair value through other comprehensive income	(5,700,000	)		-
Proceeds from disposal of financial assets measured at fair value through other comprehensive income	1,910,350			2,913,530
Net cash (used in)/ generated from investing activities	(4,612,331	)		2,775,357
Financing activities
Proceeds from issuance of share capital	6,471,433			-
Proceeds from initial public offering, net of issuance costs	-			3,739,990
Proceeds from following public offering, net of issuance costs	2,314,050			-
Interest paid	(6,102	)		(3,401	)
Repayment of other borrowings	(16,433	)		(21,665	)
Advance to related parties	(275,663	)		(336,113	)
Repayment of operating lease	(67,461	)		(34,142	)
Contribution from non-controlling interest	131,206			-
Net cash generated from financing activities	8,551,030			3,344,669

VCI Global Limited and Its Subsidiaries Interim Condensed Consolidated Statements of Cash Flows (Unaudited)
	Six months ended June 30, 2024			Six months ended June 30, 2023
	USD			USD
Net (decrease)/ increase in cash and cash equivalents	(196,969	)		2,439,532
Effect of foreign exchange	431,472			(11,702	)
Cash and bank balances at beginning of the period	1,010,455			856,058
Cash and bank balances at end of the period	1,244,958			3,283,888

FAQ

What was VCI Global's (VCIG) revenue growth in H1 2024?

VCI Global reported a 44% year-over-year revenue growth, reaching $13.7 million for the six months ended June 30, 2024.

How much did VCIG's net income increase in H1 2024?

VCIG's net income increased by 25%, reaching $5.4 million for the six months ended June 30, 2024.

What is the size of the share repurchase program announced by VCI Global (VCIG)?

VCI Global announced a $10 million share repurchase program to be implemented over the next two years.

How did VCIG's business strategy consultancy segment perform in H1 2024?

VCIG's business strategy consultancy revenue experienced a 151% year-over-year surge, reaching $11.2 million for the six months ended June 30, 2024.

What was the growth rate of VCI Global's (VCIG) fintech segment in H1 2024?

VCIG's fintech segment revenue grew by 183% year-over-year, reaching $0.7 million for the six months ended June 30, 2024.