Financial Statements And Related Announcement - Second Quarter Results
Financials Archive
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Consolidated Statement of Comprehensive Income
Q2 2020 |
Q2 2019 |
Inc/(dec) |
|
S$'000 |
S$'000 |
% |
|
| Revenue | 6,103 |
6,647 |
(8.2) |
| Cost of Sales | (3,150) |
(3,369) |
(6.5) |
| Gross profit | 2,953 |
3,278 |
(9.9) |
| Other Items of Income: | |||
| Interest Income | 41 |
31 |
32.3 |
| Other Gains | (108) |
441 |
(124.5) |
| Other Items of Expense: | |||
| Technical Support Expenses | (947) |
(1,170) |
(19.1) |
| Distribution Costs | (303) |
(412) |
(26.4) |
| Administrative Expenses | (528) |
(557) |
(5.2) |
| Other Losses | (1,532) |
(146) |
949.2 |
| Finance Costs | (30) |
(33) |
(9.0) |
| (Loss)/Profit Before Income Tax | (454) |
1,432 |
(131.7) |
| Income Tax Expenses | (192) |
(86) |
123.2 |
| (Loss)/Profit, Net of Tax | (646) |
1,346 |
(148.0) |
| (Loss)/Profit, Net of Tax Attributable to: | |||
| Owners of the Company | (992) |
1,294 |
(176.6) |
| Non-Controlling Interest | 346 |
52 |
565.3 |
| (Loss)/Profit, Net of Tax | (646) |
1,346 |
(148.0) |
2020 |
2019 |
Inc/(dec) |
|
S$'000 |
S$'000 |
% |
|
| Revenue | 10,773 |
11,807 |
(8.8) |
| Cost of Sales | (5,417) |
(5,535) |
(2.1) |
| Gross profit | 5,356 |
6,272 |
(14.6) |
| Other Items of Income: | |||
| Interest Income | 81 |
48 |
68.7 |
| Other Gains | 223 |
466 |
(52.1) |
| Other Items of Expense: | |||
| Technical Support Expenses | (2,012) |
(2,178) |
(7.6) |
| Distribution Costs | (676) |
(848) |
(20.3) |
| Administrative Expenses | (1,073) |
(1,171) |
(8.4) |
| Other Losses | (1,534) |
(273) |
461.8 |
| Finance Costs | (65) |
(67) |
(3.0) |
| (Loss)/Profit Before Income Tax | 300 |
2,249 |
(86.6) |
| Income Tax Expenses | (349) |
(320) |
9.1 |
| (Loss)/Profit, Net of Tax | (49) |
1,929 |
(102.5) |
| (Loss)/Profit, Net of Tax Attributable to: | |||
| Owners of the Company | (440) |
1,651 |
(126.6) |
| Non-Controlling Interest | 391 |
278 |
40.6 |
| (Loss)/Profit, Net of Tax | (49) |
1,929 |
(102.5) |
Consolidated Statement of Comprehensive Income
Q2 2020 |
Q2 2019 |
Inc/(dec) |
|
S$'000 |
S$'000 |
% |
|
| (Loss)/Profit, Net of Tax | (646) |
1,346 |
(148.0) |
| Other Comprehensive (Expenses)/Income: | |||
| Item that may be reclassified subsequently to profit or loss: | |||
| Exchange Differences on Translating Foreign Operations, Net of Tax |
(441) |
(318) |
(38.7) |
| Total Comprehensive(Expenses)/Income for the period | (1,087) |
1,028 |
(205.8) |
| Total Comprehensive Income/(Expenses) for the period Attributable to: |
|||
| Owners of the Company | (1,383) |
1,023 |
(235.1) |
| Non-Controlling interest | 296 |
5 |
5820.0 |
| Total Comprehensive(Expenses)/Income for the period | (1,087) |
1,028 |
(205.8) |
2020 |
2019 |
Inc/(dec) |
|
S$'000 |
S$'000 |
% |
|
| (Loss)/Profit, Net of Tax | (49) |
1,929 |
(102.6) |
| Other Comprehensive (Expenses)/Income: | |||
| Item that may be reclassified subsequently to profit or loss: | |||
| Exchange Differences on Translating Foreign Operations, Net of Tax |
(362) |
(78) |
364.1 |
| Total Comprehensive(Expenses)/Income for the period | (411) |
1,851 |
(122.2) |
| Total Comprehensive Income/(Expenses) for the period Attributable to: |
|||
| Owners of the Company | (761) |
1,592 |
(147.8) |
| Non-Controlling interest | 350 |
259 |
35.1 |
| Total Comprehensive(Expenses)/Income for the period | (411) |
1,851 |
(122.2) |
Balance Sheet
Group |
Group |
|
As at |
As at |
|
30/6/2020 |
31/12/2019 |
|
S$'000 |
S$'000 |
|
| ASSETS | ||
| Non-Current Assets | ||
| Plant and Equipment | 1,873 |
1,690 |
| Investment Property | 2,276 |
2,301 |
| Intangible Assets | 10,720 |
10,888 |
| Investments in Subsidiaries | - |
- |
| Other Financial Assets | 10,704 |
12,073 |
| Deferred Tax assets | 1,352 |
1,362 |
| Trade and Other Receivables | 592 |
599 |
| Total Non-Current Assets | 27,517 |
28,913 |
| Current assets | ||
| Inventories | 4 |
4 |
| Trade and Other Receivables | 9,977 |
11,861 |
| Other Assets | 2,891 |
3,073 |
| Cash and Cash Equivalents | 11,668 |
10,173 |
| Total Current Assets | 24,540 |
25,111 |
| Total Assets | 52,057 |
54,024 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Share Capital | 31,948 |
31,948 |
| Retained Earnings | 16,608 |
17,048 |
| Foreign Currency Translation Reserve | (8,563) |
(8,242) |
| Equity, Attributable to Owners of the Parent | 39,993 |
40,754 |
| Non-Controlling Interest | 4,683 |
4,655 |
| Total Equity | 44,676 |
45,409 |
| Non-Current Liabilities | ||
| Lease Liabilities | 160 |
- |
| Total Non-Current Liabilities | 160 |
- |
| Current Liabilities | ||
| Income Tax Payables | 338 |
344 |
| Trade and Other Payables | 3,821 |
4,615 |
| Other Liabilities | 1,836 |
1,931 |
| Lease Liabilities | 139 |
73 |
| Borrowings | 1,087 |
1,652 |
| Total Current Liabilities | 7,221 |
8,615 |
| Total Liabilities | 7,381 |
8,615 |
| Total Equity and Liabilities | 52,057 |
54,024 |
Review of results for the second quarter ended 30 June 2020 as compared to corresponding quarter ended 30 June 2019
Group Revenue
The Group recorded consolidated revenue of S$6.103 million for the quarter ended 30 June 2020 (“Q2 2020”), a decrease of 8.2% against the revenue achieved in the corresponding quarter ended 30 June 2019 (“Q2 2019”). The decline in Group revenue for Q2 2020 is attributable to lower revenue recorded by Unifiedcomms.
Unifiedcomms recorded revenue of S$2.852 million in Q2 2020, a decrease of 37.7% from the S$4.578 million recorded in Q2 2019. This decline in revenue was due to lower revenues from system sale contract.
In contrast, GlobeOSS posted revenue of S$3.251 million in Q2 2020, an increase of 57.1% from the S$2.069 million recorded in Q2 2019. This improvement in revenue was driven by higher revenues from both system sale and managed service contracts.
The Group's sales mix in Q2 2020 showed an increase in the proportionate contribution of revenue of a recurring nature, with revenue from managed service contracts representing 62.1% of the Group's total revenue in Q2 2020 as compared to 51.6% in Q2 2019. The shift in the Group's sales mix in Q2 2020 is mainly attributable to a 28.1% drop in system sales contract revenues contribution from Unifiedcomms from S$3.216 million in Q2 2019 to S$2.314 million.
Group Gross Profit and Gross Profit Margins
With the lower revenue in Q2 2020, the Group recorded gross profit of S$2.953 million, a decrease of 9.9% from the S$3.278 million achieved in Q2 2019. In addition, gross profit margin declined from 49.3% in Q2 2019 to 48.4% in Q2 2020. The decline in gross profit margin is mainly attributable to the lower proportionate contribution of system sale contract revenues by Unifiedcomms, which generally deliver higher gross profit margin, as a result gross profit margin on the Group's system sale contract revenues decreased from 46.2% in Q2 2019 to 42% in Q2 2020.
Interest Income
The Group recorded higher interest income of S$0.041 million as compared to S$0.031 million recorded in Q2 2019, in line with higher bank balances in current reporting quarter.
Other gains
The Group had not recorded any other gain in Q2 2020, as compared to other gain of S$0.441 million in Q2 2019 mainly due to:-
- Foreign exchange loss of S$0.155 million in current quarter as a result of unfavourable exchange movements of USD and PKR against SGD in Q2 2020; and
- Fair value loss of S$1.527 million recorded in current quarter under Other losses , from the Group's venture investment portfolio as compared to fair value gain of S$0.441 million in Q2 2019.
Other Items of Expense
The Group recorded total expenses of S$3.34 million in Q2 2020, 44.1% higher than the S$2.318 million incurred in Q2 2019. This is mainly attributable to fair value loss of $1.527 million assessed on the Group's venture investment portfolio in current quarter, as certain investees's businesses and capital raising activities were severely impacted by the CoVid-19 pandemic. This fair value loss is unrealised and has no cash impact to the Group.
The increase in other losses resulting from the above fair value loss was partly mitigated by lower expenses recorded in overall operating expenses as a result of lower payroll related cost, stemming from Covid 19 related government subsidy allowances received and reduction in headcounts.
Group Net Profit and EBITDA
The Group recorded higher net loss of S$0.646 million and LBITDA of S$0.153 million in Q2 2020, as compared to S$1.346 million in net profit and S$1.725 million in EBITDA recorded by the Group in Q2 2019. The higher net loss and LBITDA recorded in Q2 2020 are mainly attributable to the flow-down effects of the lower revenue, gross profit margin, other income, and higher operating expenses recorded in Q2 2020.
Detailed Segmental Breakdown of Group Revenue and Gross Profit
The detailed segmental breakdown of the Group's revenue and gross profit for Q2 2020, together with comparative results for Q2 2019 is provided below:
Table 8.1: Group consolidated revenue as analysed by business unit for the quarter ended 30 June
Q2 2020
S$'000 |
Sales mix
% |
Q2 2019
S$'000 |
Sales mix
% |
|
| Unifiedcomms | 2,852 |
46.7 |
4,578 |
68.9 |
| GlobeOSS | 3,251 |
53.3 |
2,069 |
31.1 |
| Captii Ventures | - |
- |
- |
- |
| Others | - |
- |
- |
- |
| Total | 6,103 |
100.0 |
6,647 |
100.0 |
Unifiedcomms - Segment for content-driven mobile VAS, messaging and signaling systems, solutions and managed services.
GlobeOSS - Segment for mobile network operation support systems, solutions and managed services.
Others - Segment for operational headquarters of the Group and investment holding.
Table 8.2: Group consolidated revenue as analysed by geographical segment for the quarter ended 30 June
| External Sales | Q2 2020
|
|||
Unifiedcomms
S$'000 |
GlobeOSS
S$'000 |
Others
S$'000 |
Group
S$'000 |
|
| South East Asia (SEA) | 2,509 |
3,251 |
- |
5,760 |
| South Asia (SA) | 85 |
- |
- |
85 |
| Middle East & Africa (MEA) | 258 |
- |
- |
258 |
| Others | - |
- |
- |
- |
| Total | 2,852 |
3,251 |
- |
6,103 |
| External Sales | Q2 2019
|
|||
Unifiedcomms
S$'000 |
GlobeOSS
S$'000 |
Others
S$'000 |
Group
S$'000 |
|
| SEA | 4,220 |
2,069 |
- |
6,289 |
| SA | 134 |
- |
- |
134 |
| MEA | 224 |
- |
- |
224 |
| Others | - |
- |
- |
- |
| Total | 4,578 |
2,069 |
- |
6,647 |
Table 8.3: Group consolidated revenue as analysed by contract type for the quarter ended 30 June
| External Sales | Q2 2020
|
Q2 2019 |
||||
System Sale(1) |
Managed Service(2) |
Group |
System Sale(1) |
Managed Service(2) |
Group |
|
| Revenue | 2,314 |
3,789 |
6,103 |
3,216 |
3,431 |
6,647 |
| Gross Profit | 973 |
1,980 |
2,953 |
1,485 |
1,793 |
3,278 |
| Gross Profit (%) | 42.0% |
52.3% |
48.4% |
46.2% |
52.3% |
49.3% |
(1) System Sale - this refers to contracts that involve the outright purchase by customers of systems comprising the Group's products and technologies, and where these systems are in turn delivered as turnkey solutions. The scope of work for a system sale contract includes system design, implementation, testing and commissioning services.
(2) Managed Service - this refers to contracts that involve the provision of both systems comprising the Group's products and technologies as well as the Group's professional services, on a recurring, revenue sharing, software-as-a-service, pay-per-use or monthly or quarterly fixed and variable fee basis. Also treated as a managed service contract are system maintenance and technical support contracts with existing customers of the Group.
Review of results for the six months ended 30 June 2020 as compared to corresponding financial period ended 30 June 2019
Group Revenue
The Group recorded consolidated revenue of S$10.773 million for the six months ended 30 June 2020 (“6M 2020”), a decrease of 8.8% against the revenue achieved in the corresponding period ended 30 June 2019 (“6M 2019”). The decline in Group revenue for 6M 2020 is attributable to lower revenue recorded by Unifiedcomms.
Unifiedcomms recorded revenue of S$5.667 million in 6M 2020, a decrease of 24.7% from the S$7.530 million recorded in 6M 2019. This decline in revenue was due to lower revenues from system sale contract.
In contrast, GlobeOSS posted revenue of S$5.106 million in 6M 2020, an increase of 19.4% from the S$4.277 million recorded in 6M 2019. This improvement in revenue was driven by higher revenues from both system sale and managed service contracts.
The Group's sales mix in 6M 2020 showed an increase in the proportionate contribution of revenue of a recurring nature, with revenue from managed service contracts representing 72.4% of the Group's total revenue in 6M 2020 as compared to 56.4% in 6M 2019. The shift in the Group's sales mix in 6M 2020 is mainly attributable to a 42.3% drop in system sales contract revenues contribution from Unifiedcomms from S$5.147 million in 6M 2019 to S$2.968 million.
Gross Profit and Gross Profit Margins
With the lower revenue in 6M 2020, the Group recorded lower gross profit of S$5.356 million, a decrease of 14.6% from the S$6.272 million achieved in 6M 2019. In addition, gross profit margin declined from 53.1% in 6M 2019 to 49.7% in 6M 2020. The decline in gross profit margin is mainly attributable to the lower proportionate contribution of system sale contract revenues by Unifiedcomms, which generally deliver higher gross profit margin, as a result gross profit margin on the Group's system sale contract revenues decreased from 56.5% in 6M 2019 to 50.2% in 6M 2020.
Gross profit margin recorded by the Group on its managed service contract revenues also decreased to 49.5% in 6M 2020 from 50.5% in 6M 2019. This decrease in managed service gross profit margin was mainly due to higher third-party cost being incurred on certain contracts.
Interest Income
The Group recorded higher interest income of S$0.081 million as compared to S$0.048 million recorded in 6M 2019, in line with higher bank balances in current reporting period.
Other gains
The Group recorded other gains of S$0.223 million in 6M 2020, 52.1% lower than the S$0.466 million recorded in 6M 2019. This is mainly attributable to fair value loss of S$1.527 million recorded in 6M 2020 under Other losses , from the Group's venture investment portfolio as compared to fair value gain of S$0.466 million in 6M 2019. This decrease was partly mitigated by the foreign exchange gain of S$0.16 million in 6M 2020 as a result of a favourable exchange rate movement of USD against SGD, the Group's reporting currency in 6M 2020.
Other Items of Expense
The Group recorded total expenses of S$5.36 million in 6M 2020, 18.1% higher than the S$4.537 million incurred in 6M 2019. This is mainly attributable to fair value loss of $1.527 million assessed on the Group's venture investment portfolio in current quarter, as certain investees 's businesses and capital raising activities were severely impacted by the CoVid-19 pandemic. This fair value loss is unrealised and has no cash impact to the Group.
The increase in other losses resulting from the above fair value loss was partly mitigated by lower expenses recorded in overall operating expenses as a result of lower payroll related cost, stemming from Covid 19 related government subsidy allowances received, reduction in headcounts and absence of foreign exchange loss.
Net Profit and EBITDA
The Group recorded higher net loss of S$0.049 million and EBITDA of S$0.888 million in 6M 2020 as compared to S$1.929 million in net profit and S$2.848 million in EBITDA recorded by the Group in 6M 2019. The higher net loss and lower EBITDA recorded in 6M 2020 are mainly attributable to the flow-down effects of the lower revenue, gross profit margin, other income and higher operating expenses recorded in 6M 2020.
Detailed Segmental Breakdown of Group Revenue and Gross Profit
The detailed segmental breakdown of the Group's revenue and gross profit for 6M 2020, together with comparative results for 6M 2019 is provided below:
Table 8.4: Group revenue as analysed by business unit for the six months ended 30 June
2020
S$'000 |
Sales mix
% |
2019
S$'000 |
Sales mix
% |
|
| Unifiedcomms | 5,667 |
52.6 |
7,530 |
63.8 |
| GlobeOSS | 5,106 |
47.4 |
4,277 |
36.2 |
| Captii Ventures | - |
- |
- |
- |
| Others | - |
- |
- |
- |
| Total | 10,773 |
100.0 |
11,807 |
100.0 |
Unifiedcomms - Segment for content-driven mobile VAS, messaging and signaling systems, solutions and managed services.
GlobeOSS - Segment for mobile network operation support systems, solutions and managed services.
Captii Ventures - Segment for strategic investment in early and late-stage technology ventures.
Others - Segment for operational headquarters of the Group and investment holding.
Table 8.5: Group revenue as analysed by geographical segment for the six months ended 30 June
| External Sales | 2020
|
|||
Unifiedcomms
S$'000 |
GlobeOSS
S$'000 |
Others
S$'000 |
Group
S$'000 |
|
| South East Asia (SEA) | 5,174 |
5,102 |
- |
10,276 |
| South Asia (SA) | 193 |
- |
- |
193 |
| Middle East & Africa (MEA) | 300 |
- |
- |
300 |
| Others | - |
4 |
- |
4 |
| Total | 5,667 |
5,106 |
- |
10,773 |
| External Sales | 2019
|
|||
Unifiedcomms
S$'000 |
GlobeOSS
S$'000 |
Others
S$'000 |
Group
S$'000 |
|
| SEA | 7,018 |
4,274 |
- |
11,292 |
| SA | 288 |
- |
- |
288 |
| MEA | 224 |
- |
- |
224 |
| Others | - |
3 |
- |
3 |
| Total | 7,530 |
4,277 |
- |
11,807 |
Table 8.6: Group revenue as analysed by contract type for the quarter ended 30 June
| External Sales | 2020
|
2019 |
||||
System Sale(1) |
Managed Service(2) |
Group |
System Sale(1) |
Managed Service(2) |
Group |
|
| Revenue | 2,968 |
7,805 |
10,773 |
5,147 |
6,660 |
11,807 |
| Gross Profit | 1,491 |
3,865 |
5,356 |
2,908 |
3,364 |
6,272 |
| Gross Profit (%) | 50.2% |
49.5% |
49.7% |
56.5% |
50.5% |
53.1% |
(1) System Sale - this refers to contracts that involve the outright purchase by customers of systems comprising the Group's products and technologies, and where these systems are in turn delivered as turnkey solutions. The scope of work for a system sale contract includes system design, implementation, testing and commissioning services.
(2) Managed Service - this refers to contracts that involve the provision of both systems comprising the Group's products and technologies as well as the Group's professional services, on a recurring, revenue sharing, software-as-a-service, pay-per-use or monthly or quarterly fixed and variable fee basis. Also treated as a managed service contract are system maintenance and technical support contracts with existing customers of the Group.
Review of the Group's financial position as at 30 June 2020 as compared to the Group's financial position as at 31 December 2019
Non-cash current assets of the Group decreased from $14.938 million as at 31 December 2019 to S$12.872 million as at 30 June 2020. This 13.8% decrease in non-cash current assets was mainly due to a decrease in trade and other receivables as a result of lower revenue recorded and collections.
Total non-current assets of the Group decreased from S$28.913 million as at 31 December 2019 to S$27.517 million as at 30 June 2020 representing a decrease of 5.1%. This decrease was mainly due to a reduction in fair value of S$1.527 million in the Group's venture investment portfolio recorded as other financial assets. The fair value movements assessed on the Group's venture investment portfolio, which are unrealised, is a result of changes in estimated fair valuation of the Group's venture investments as certain investees of the Group's venture investment portfolio were impacted by the CoViD-19 pandemic on both their businesses and capital raising activities.
Total liabilities of the Group decreased from S$8.615 million as at 31 December 2019 to S$7.381 million as at 30 June 2020. This 14.3% decrease in total liabilities is attributable to a decrease in trade and other payables and borrowings, following repayments in the reporting period.
Review of the Group's cash flow for the quarter and six months ended 30 June 2020 as compared to the corresponding period ended 30 June 2019
The Group's net cash flow from operations for Q2 2020 was S$0.584 million, in contrast with the net cash flow used in operations of S$1.108 million for Q2 2019. This significant increase was primarily due to a lower working capital of S$0.794 million for Q2 2020, as compared to S$2.392 million for Q2 2019, which was contributed by higher collection from trade receivables.
The Group's net cash flow from operations for 6M 2020 was S$3.610 million, as compared to S$0.233 million for 6M 2019, an increase of 1,449.4%. This significant increase was primarily due to a favourable change in working capital of S$1.191 million for 6M 2020, in contrast with the unfavourable working capital change of S$2.149 million for 6M 2019, which was contributed by higher collection from trade receivables.
The Group's net cash flow used in investing activities for Q2 2020 was S$0.162 million, as compared to S$0.183 million for Q2 2019. The lower net cash used in investing activities was mainly due to the lower investment in plant and equipment in Q2 2020, as compared to Q2 2019.
The Group's net cash flow used in investing activities for 6M 2020 was S$0.373 million, as compared to S$0.281 million for 6M 2019. The higher net cash used in investing activities was mainly due to the hgher investment in plant and equipment in 6M 2020, as compared to 6M 2019.
The Group's net cash flow used in financing activities for Q2 2020 was S$0.532 million, in contrast with the net cash flow from financing of S$0.121 million for Q2 2019. This increase was mainly due to absence of proceeds from borrowings and dividend payout to Non-Controlling Interest in Q2 2020.
The Group's net cash flow used in financing activities for 6M 2020 was S$0.826 million, as compared to S$0.202 million for 6M 2019. This increase was mainly due dividend payout to Non-Controlling Interest and leases repayment.
Commentary
The CoViD-19 pandemic has resulted in many countries in our Group's regions of focus imposing movement and travel restrictions, including the movement control order in Malaysia and the 'circuit-breaker' lockdown in Singapore. Such restrictions have adversely affected many businesses that are prohibited to trade, or that have been asked to significantly alter the scope of their operations within government-prescribed safety limits. The uncertainty of economic recovery from the shock caused by COVID-19 and the prospect of a protracted economic slowdown globally, especially in the Group's regions of focus, have weighed on the minds of management and the directors of the Group when considering the outlook for the remainder of financial year.
The impact of CoViD-19 on Unifiedcomms and GlobeOSS has fortunately been minimal in the year to-date. This is because these businesses operate primarily in the field of telecommunications, an essential service in any economy today. In addition, Unifiedcomms and GlobeOSS businesses have been made capable of fully-functioning under a work-from-home mode of operation, well ahead of movement control restrictions or lockdown orders being enforced. The Group's primary customers in the Unifiedcomms and GlobeOSS businesses are telecommunications network operators and service providers that have continued to operate normally throughout the CoViD-19 restrictions, albeit remotely and through digital engagement, rather than face-to-face interaction. Contracts in-hand continue to be progressed and management of the Group are hopeful that new projects and initiatives requiring our products and services, will continue to be pursued by customers in the months ahead. The possibility remains however, that larger system sale contracts that have yet to be committed this year, may be deferred by customers to next year, or even abandoned entirely if macroeconic and industry conditions deteriorate significantly. Some managed service contracts of the Group which are impacted by government restrictions or directives arising from CoViD-19 policy measures, may meanwhile continue to show weaker performance than before.
At Captii Ventures, the Group' venture investment business, the climate for either business development or funding has become more challenging since the CoViD-19 pandemic set in. As a result certain investee in the Group's venture investment portfolio have been affected with dampened valuations in the year to-date, as a fair value loss of S$1.527 million was recorded in Q2 2020. If the adverse microeconomic and funding environment persists to the end of the year, other investees in the venture investment portfolio may face difficulty in raising further capital, while those that successfully raise may be faced with further dampened valuations. Management has taken active, early measures to perform impact assessment as well as in assisting investees to plan and manage through a more hostile environment for both business and funding. Investment management activities to assist investees and protect our investments will be the priority at Captii Ventures for the remainder of the year.
Against this negative macroeconomic backdrop for the future, the Group remains optimistic and will continue to work closely with customers and investees, to minimise any potential negative impact of CoViD-19-related developments on Group financial performance. Management of the Group has in recent months taken an active and measured approach to managing risks to protect the Group's people and assets, and will sustain these efforts until the pandemic resolves.
Management will further the work it has been doing to strengthen the Group's managed service contract portfolio and will invest even more selectively in the venture investment business. Interest in internet-driven application services for enterprises, in the broad domain of fintech, as well as in internet and handset-app delivered digital media, have been heightened in the current environment. These areas will continue to be the focus for the Group's venture investment activities, and is expected complement the organic growth strategies of the Unifiedcomms and GlobeOSS businesses.