KUALA LUMPUR (June 14): Water and wastewater management company Salcon Bhd expects to see progressive contribution from its new investments in technology services and e-commerce to drive positive growth for the company in its financial year ending Dec 31, 2018 (FY18).

The group's first quarter ended March 31, 2017 (1QFY17) net loss narrowed to RM3.8 million from RM16.7 million seen in the same period last year, while revenue grew 22% to RM19.4 million from RM15.9 million.

"We are having quite a few new start-ups, such as [in] e-commerce, technology [services] and transportation divisions, which require [initial] investments," said the group's executive director Datuk Eddy Leong Kok Wah when speaking to reporters after the group's annual general meeting today.

"We are optimistic on seeing profit from these new investments from next year onwards, as the initial investments will take time to generate business. I think next year will be looking much better [for Salcon]," he added.

Under Salcon's technology services division, its 50.1%-owned subsidiary, Volksbahn Technologies Sdn Bhd (VBT), has secured a 15-year concession from Prasarana Malaysia Bhd to lay and operate fibre-optic cables along the light rail transit (LRT) and monorail lines in the Klang Valley.

Leong said the group has to lay fibre optic cables on a total of 108km of transport lines, covering about 85 LRT and monorail stations.

"We have signed up with major telco companies such as Celcom Bhd, U Mobile Sdn Bhd and Digi Telecommunications Sdn Bhd to lease broadband facilities to their customers, leveraging on our fibre optic cable network," Leong said.

VBT also signed a master agreement with edotco on in August last year to "fiberise" its 1,400 cell sites, which will provide mobile backhaul services to other telcos.

"Currently, there are 52 stations on the transport lines that can already offer the [mobile backhaul services] to telco customers, using our fibre optic cable," Leong added.

He said the remaining 33 stations should be completed with the services by the end of this year, adding that profit contributions from the division will come in progressively as more demand for the mobile backhaul services comes in.

Meanwhile, Leong added that the group prefers to be selective on the utilisation of its current cash-rich position.

"Our investments do not always require a large amount in capital expenditure, but we are being conservative and looking for better opportunities to [use the cash we have]," he said, adding that the group currently has a net cash of about RM250 million, after its disposal of its last water concession in China in April last year.

The group is currently tendering for RM2.2 billion worth of jobs for its water and wastewater management division across Malaysia, as well as in Vietnam, Sri Lanka and Myanmar.

"We are looking at a success rate of about 15% to 20% for our current tenders," Leong added.

Salcon shares closed 0.5 sen or 0.81% lower at 61 sen, with some 457,600 shares exchanging hands.