SMTrack fails to extend contract with customs

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KUALA LUMPUR (Nov 27): ACE Market-listed SMTrack Bhd did not manage to extend its contract with the Royal Malaysian Customs (RMC), to operate the container security and trade facilitation system for the latter.

In its filing to Bursa Malaysia today, SMTrack, which provides Radio Frequency Identification (RFID) track and trace solutions, said it had received a letter (dated Oct 20, 2014) from RMC, expressing that it does not intend to extend the old contract, which expired on Aug 31.

SMTrack had in April and August 2012 respectively, entered into a main agreement and supplemental agreement with RMC, to implement and operate the container security and trade facilitation system for the latter, by utilising RFID.

The company had originally hoped for a ten years extension of the contract.

Meanwhile, in the same filing to Bursa today, SMTrack also mentioned it is still waiting for an official response from the Economic Council, in relation to its proposal made in late September, with regards to offering tracking solutions for containers with the purpose of curbing the smuggling activities within the free zones.

SMTrack, controlled by its Non-Executive Chairman Datuk Abdul Hamed Sepawi with a direct stake of 22.54%, had been loss making since its listing on April 18, 2011, in which it raised RM17.67 million.

The group’s net loss for the financial year ended Sept 30, 2013, widened to RM17.11 million, from RM2.68 million, on higher administrative expenses and cost of sales. Revenue dropped 14% to RM1.16 million, from RM1.34 million.

However, its Chief Executive Officer Yow Lock Sen had in late October, via a news conference, said he is optimistic that SMTrack will turnaround in financial year 2015.

SMTrack closed unchanged today at 10 sen, giving it a market capitalisation of RM27.24 million.