News Release-- February 04, 2005

CSAM Announces RM105 Mil Q3FY05 Revenue

Petaling Jaya - Computer Systems Advisers (M) Berhad (CSAM) announced its unaudited results for the third quarter (Q3) of financial year 2005 (FY05) yesterday.

The Group announced a revenue of RM105.00 million for the current quarter compared to RM79.04 million in the corresponding quarter ended 31 December 2003, which is an increase of 32.9 percent, while profit before taxation (PBT) decreased to RM0.01 million from RM2.86 million for the respective quarters.

On year to date basis, the Group’s revenue for the current period increased to by 50 percent to RM291.57 million compared to RM194.44 million in the corresponding period ended 31 December 2003 and profit before tax increased by 2.63 percent to RM7.87 million from RM7.67 million for the respective periods. Net Tangible Assets (NTA) per share stands at RM 1.89 per share.

The revenues for both the current quarter and period have increased mainly due to higher revenue from IT infrastructure systems & solutions (ITSS) business and outsourcing business. However, the PBT for the current quarter was affected by the continued higher than expected operating expenses incurred by the outsourcing business, coupled with the losses arising from the disposals of Com-Line Systems Sdn Bhd and other investments.

In Q3FY05, ITSS contributed 60 percent of the Group revenue for the nine months period beginning April to December 2004 as compared to the 57 percent contributed in the corresponding period ended December 2003. IT Outsourcing has increased to 21 percent of revenue compared to 12 percent in the corresponding period of 2003. Customer Services and Support contributed 17 percent of revenue while Software made a contribution of 2 percent.

The banking and insurance sectors led the other sectors by contributing 37 percent to CSAM’s revenue in Q3FY05 as compared to 22 percent in Q3FY04. The manufacturing sector contributed to 19 percent of the Group’s revenue followed by the securities sector which grew to 12 percent this quarter compared to 6 percent in Q3FY04. Meanwhile, the telecommunications and utilities sectors contributed 7 percent in Q3FY05.

“While the outsourcing business still continues to be a challenge in terms of profitability for CSAM, the Group is committed to expanding its investment in this business segment due to the potentially high demand from enterprises for such services. This is evidenced by the successful award of two new managed services contracts by a financial regulatory body and a multi-national distribution company. The contracts, which have three-year base periods plus two-year options, have an estimated total value of RM10 million, if all options are exercised,” said Mr Chuah Tai Eu, Managing Director, CSAM.

“In parallel, the Group will continue to focus on its core competencies and penetrate the high growth enterprise market space in enterprise infrastructure, business intelligence, networking and information life cycle management solutions and services,” continued Chuah.

“CSAM is in a unique postion to deliver complex systems integration projects to enterprises and offer value-added services such as outsourcing to help these enterprises manage and reduce the complexities associated with their IT environments. We will continue to showcase these capabilities to our clients in the strategic sectors mentioned by Mr Chuah earlier," added Mr Peter Yong, Director, CSAM.

Other corporate highlights include CSAM being awarded the Best Security – Gold Partner Half Year FY05 and Highest Growth – Gold Partner Half Year FY05 by 3COM in view of its growth contributions towards 3COM’s products and market share.