09 GHL SYSTEMS BERHAD 199401007361 (293040-D) ANNUAL REPORT 2021 1. OVERVIEW OF THE GROUP’s BUSINESS AND OPERATIONS GHL Systems Berhad (“the Group”) is a leading ASEAN payment services provider with operations in Malaysia, Philippines, Thailand, Indonesia, and Australia. The Group provides end to end payment services encompassing physical, e-commerce, and QR payments acceptance, and is one of the region’s top merchant acquirers. GHL manages and oversees more than 398,000, footprint of payment touchpoints across its ASEAN markets that enable credit/debit card, e-wallets, contactless payment, loyalty, prepaid credit top up, and bill collection payment services. The Group has three (3) core business pillars: 1. Transaction Payment Acquisition (“TPA”) comprises revenue derived from two (2) distinct sub segments: i) e-pay services which include Telco prepaid and other credit top-up facilities and bill collection services for consumers (“reload and collection services”) and; ii) GHL’s merchant acquiring and electronic payment services (“electronic payment services”). 2. Shared Services comprises revenue derived from the sale, rental, and maintenance of EDC terminals and other payment acceptance devices. 3. Solution Services comprises revenue derived from proprietary payment solutions which include customised online platforms, loan collections, loyalty systems and other bank or merchant specific applications. The Group’s focus is to become ASEAN’s largest merchant acquirer by directly contracting with merchants (“merchant acquisition”) under its TPA initiative. These business segments have since grown rapidly, resulting in a higher proportion of annuity income and a significant change in the business segment mix for the Group (See Sections 2.5 and 3.1 for details). GHL has been listed on Bursa Malaysia since 2003. 2. DISCUSSION AND ANALYSIS OF THE FINANCIAL RESULTS AND CONDITIONS Analysis of Financial Results 2.1 Revenue Group revenue improved 7.7% YoY to RM360.2 million (2020 – RM334.5 million) despite the impacts of the global COVID-19 pandemic across its group operations. Declines registered in the Shared Services and Solutions Services business pillars were boosted by a 15.4% growth in its TPA business segment which accounted for 63.6% of group revenue. Geographical wise, Malaysia and Philippines’ 2021 revenue grew year-on-year whereas Thailand was down as it continues to be impacted by its tourism sector. 2.2 Net Profit Pre-tax profits jumped 90.8% to RM40.7 million as compared to RM21.3 million a year ago. Pre-tax margins grew to 11.3% (2020 – 6.4%). Net profit after tax and minority interest improved in tandem by 107.8% YoY to RM28.2 million (2020 – RM13.6 million), with the improvement coming from TPA division. 2.3 Taxation The effective tax rate for 2021 was 30.8% (2020 – 57.2%) which was higher than the statutory tax rate mainly due to non-tax allowable expenses. Post-tax and minority interest profit margins were higher at 7.8% in 2021 as compared to 4.1% in 2020 but slightly below the pre-COVID figure of 8.3% in 2019. MANAGEMENT DISCUSSION AND ANALYSIS
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