News Release-- July 22, 2005

CSAM Q1FY06 Results Reveal Firm Footing

Petaling Jaya – Computer Systems Advisers (M) Berhad (CSAM) announced its unaudited results for the first quarter (Q1) of financial year 2006 (FY06) ended 30 June 2005.

The Group recorded a revenue of RM94.54 million for the first quarter of financial year 2006 (FY06) versus a revenue of RM86.74 million recorded in the corresponding quarter of financial year 2005 (FY05). This represents a 9 percent increase in revenue for Q1FY06. Operating Profits for Q1FY06 increased by 20.7 percent to RM5.67 million compared with RM4.70 million in the corresponding quarter ended 30 June 2004.

Earnings Per Share (EPS) for Q1FY06 is at 4.01 sen. Net Tangible Assets (NTA) per share as at 30 June 2005 stands at RM1.98 per share.

IT Infrastructure Systems and Solutions (ITSS) business contributed 51 percent to the Group’s Q1FY06 revenue while Customer Services and Support (CSS) contributed 16 percent for the same period. IT Outsourcing saw a marked increase from 21 percent in the corresponding quarter of FY05 to 32 percent in Q1FY06.

Q1FY06 operating profit mix by core business revealed that IT Outsourcing contributed 34 percent, CSS contributed 53 percent while ITSS and Software recorded 11 percent and 2 percent contributions respectively.

The banking, finance & insurance sectors increased their revenue contribution in Q1FY06 to 44 percent compared to 38 percent in the corresponding quarter of FY05. The manufacturing sector’s contribution remained steady at 18 percent while the securities and telecommunications sectors recorded a 10 percent and 6 percent contribution respectively with trading & services showing 10 percent.

“We are on track with the improved financial results recorded for Q1FY06. The Group’s performance is a result of continuously focusing on its core competencies, with special emphasis on IT outsourcing which we believe is a high potential growth area for the company and CSAM is ready to tap the potential in this growing market,” said Mr Chuah Tai Eu, Managing Director, CSAM.

“The hands-on experience gained from our IT outsourcing projects, both global as well as local, has given CSAM the dual advantage of adopting global best practices from a local perspective to deliver high quality services to our customers. With strong customer relationships and referable installed base, we will continue to drive increasing recurring revenue through outsourcing, break-and-fix maintenance services and other professional services,” he continued.

“On top of that, CSAM also aims to leverage on its experience in large scale outsourcing projects to provide best-of-breed managed services solutions to our customers and prospects in the small to medium size enterprise (SME) category. We believe that the efficiency and benefits that we can provide to enterprises through outsourcing or managed services, is not limited to large enterprises. This strategy will allow the company to scale its outsourcing business beyond the handful of large contracts secured and enable the company to grow to a broader, more sustainable customer base,” said Mr Peter Yong, Director, CSAM.

In Q1FY06, among the contracts that CSAM successfully secured are a RM3.25 million contract to provide storage systems to a leading Malaysian banking group, in collaboration with a software application provider, and a RM2 million contract to supply IT infrastructure to a major lead frames manufacturer in the island state of Penang. The company also secured a RM3.4 million storage infrastructure and data protection deal from a hard disk manufacturer and a 3-year RM2.5 million contract with a local government agency to build, deliver and commission electronic kiosks nationwide.

Corporate highlights include CSAM becoming Malaysia’s first Microsoft Gold Certified Partner for Security Solutions besides Advanced Infrastructure Solutions.