Pacific & Orient to see IT Division bear fruit soon
The Star, 28 February 2000
By P.W. Thong.

GENERAL insurance company Pacific and Orient Bhd (P&O) will soon see its information technology division bear fruit, as its basic IT-infrastructures have already being laid, its chief executive officer Chan Thye Seng said.

From being a backroom system to support its insurance business in the early nineties, the company's IT division has since grew to a broader perspective, and is now ready to take on a global approach, - Chan told Star Business in an interview.

The company, known by many as a general insurer, would soon see a different landscape altogether as it moves more aggressively into the IT world.

Considering its partnerships with leading international IT corporations such US-based Lucent Technologies, MCI Worldcom and Ardent Software, the company is at the forefront in the tech race in Malaysia.

While the company's general insurance business will remain as its core business, its focus will be confined to the domestic market, whereas its IT division is expected to serve both the domestic and international markets.

"We are a step ahead of others in terms of the technology adaptation," said Chan, adding that the company was already toying with voice-over-Internet protocol (IP), satellite video conferencing a few years ago.

The company's IT division consists of four wholly owned subsidiaries committed to creating software and distribution of hardware namely Pacific Netlab Sdn Bhd, P&O Resources Sdn Bhd, P&O Technologies Sdn Bhd and Pacific Netlab (Thailand) Co. Ltd.

Taking advantage of the vast opportunities offered by the insurance industry, Pacific Netlab is today a top supplier of IT solutions to the South East Asian insurance industry.

The company is currently developing new software for other business opportunities.

Recently it bought over Mesiniaga (Thailand), a distributor of licensed software and hardware, before changing its name to Pacific Netlab (Thailand) Co Ltd.

P&O Technologies Sdn Bhd, which was originally formed in 1996, as the data network management company for the company's insurance division and to support over 800 independent insurance agents in the country, was in 1998 appointed as an authorised Independent Software Vendor (ISV) by US-based Lucent Technologies under it's Asia Pacific BusinessWorks-Alliance Programme.

Currently, the company (P&O Technologies) concentrates on telephone equipment and call centre solutions offered by Lucent in the local market by providing a range of professional services to support the Lucent products, including telephone switches, integrated voice & data networking, computer telephony integration, as well as pro risk management.

It also provides consulting services for the computer and computer telephony industries, and to assist companies incorporate the latest technologies into their existing data and voice networks, with customers from Malaysia to nearby countries such as Singapore and Thailand.

For the financial year ended 30 Sept 1999, group pre-tax profit almost doubled to RM72.8mil from RM38.5mil in 1998, despite a 24% drop in group turnover to RM147,7mil from RM196.3mil.

Net profit registered a 157% increase to RM68.3mil from RM26.6mil in the previous year.

This translates into an annualised earnings per share (EPS) of 69 sen in 1999 compared to 27 sen in 1998.

"We are looking at marketing our services on a global basis, as we have presence in the US, which is the world's largest market right now." said Chan.

In future, the company will see a higher contribution from its IT division from the present 3% to 4%.

"We are creating a second value added business out of what we do best - the insurance business."

"It's time for people to recognise what we have been doing," he said, adding that the group had spent close to RM50mil to build up its IT division and the necessary infrastructure.

PACIFIC & ORIENT BHD
FIVE-YEAR FINANCIAL HIGHLIGHTS (RM mil)

YEAR

1999

1998

1997

1996

1995

Turnover

147.7

196.3

252.4

252.0

237.0

Pre-tax Profit

72.8

38.5

51.2

70.5

78.3

Net Profit

68.3

26.7

35.2

49.7

53.4

Shareholders Fund

277.8

232.0

226.3

239.4

200.1

EPS (RM)

0.69

0.27

0.36

0.50

0.68

Dividend Share (Sen)

30

30

68

15

15

Data and information is provided for information only, and is not intended for trading purposes. Neither Pacific & Orient Berhad nor any of its subsidiaries shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

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