The company behind what could turn out to be Cambodia’s largest-ever business deal, Nexbis Limited, announced net losses on Tuesday of $49.6 million in its report for the financial year ending June 30.
The announcement marked a stark turnaround in the company’s performance, as it recorded net profits of $45.78 million in the previous year.
“The last financial year was without doubt the most challenging in our history for both the company and our shareholders,” Nexbis CEO Johann Young said in the report.
The company’s deal with Cambodia, touted as being worth $700 million, was announced by the Ministry of Interior in May during a business forum held here by Malaysian and Cambodian companies.
The company directly behind the deal was the Kuala Lumpur-headquartered Nexbis Sdn Bhd, a Malaysian company owned by Nexbis Limited, which is listed on the Australian Securities Exchange.
Officials in Cambodia have said Nexbis will help the government streamline its national security systems by printing new passports and providing Cambodia with a “turnkey national security system,” as it was called in a copy of the agreement received in May.
But members of the opposition have questioned the lack of transparency in allocating the contract. Critics have also raised questions as to exactly how Cambodia will pay for such a large deal, which amounts to more than a third of this year’s entire national budget.
In its report, Nexbis announced Tuesday that no dividends were paid to shareholders during the 12-month period ending June 30.
The company said it planned to spur new growth by “restructuring” existing projects in China and Malaysia.
The company also said 37 potential projects across Europe, the US, South America, Africa, the Middle East, Southeast Asia and Central Asia were also in the pipeline.
“A number of these are in advanced stages of either tender or direct negotiations,” the report said, without adding any further details.
Once news of the $700 million deal was made public in May, government officials and local businesspeople raised eyebrows at the investment’s price tag, the largest ever seen in Cambodia.
Interior Ministry spokesman Khieu Sopheak said yesterday that the government would open up the bidding process to other companies looking to land the contract.
“At the ministry, we have a policy that [the contract] should be an auction for the highest best bid,” he said. “We need to upgrade our passports to compete and to follow with our neighboring countries.”
He added that no decision had yet been made by the government.
Shares at Nexbis closed at AU$0.065 in Sydney yesterday, an 84.19 percent drop year-on-year.