Loss Making XOX Continues Losing Trend

XOX Berhad which is a Mobile Virtual Network Provider has been predominantly involved in telecommunication and prepaid business since its inception. Despite the market for such business having been opportunistic, the MVNO has not been seeing any light for the past 5 years.

Since 2017, XOX has been reporting a loss with RM0.788 million in 2017 to now a staggering RM46.8 million for 2021 financials. Accumulatively for the past 5 years, the group’s loss before tax has been a staggering RM136 million! The company has been on a losing trend despite revenue jumping from RM179 million in 2017 to RM334 million in 2021, so what is going on in XOX?

Let us have a look at 2021, for the financial year ended, the group saw revenue growth of 33% or RM83.19 million to RM334.63 million compared to RM251.44 million for 2020 this was despite the continued lockdowns and economic tremors caused by the COVID-19 pandemic. This rise in revenue XOX attributed to the nature of connectivity services it offered, essentially the digital marketing and target advertising, entry-level phone bundling plan via paid off.

Despite the growth in revenue, the group posted a loss before tax of RM46.86 million for the financial year under review. XOX says the loss reported arose from the fair value loss adjustment in quoted shares investment of RM43.60 million and RM7.74 million share of loss of associates together with impairment loss on investment in associates.

With such bleak performance, the group is cautiously optimistic about the business model and is betting on its core business on its future outlook. While the industry is poised to herald the era of 5G, XOX should be also tackling the possibility of pivoting its business and readying for this technology. But this will require huge capital investment and strategic collaboration, the question then lies in how resourceful will the group be and how confident will the markets be with its plan.

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