Cyberjaya, 20 February 2023 – Dagang NeXchange Berhad (“DNeX”) has reported its set of financial results for the second quarter ended 31 December 2022 (“2Q FY2023”) where the Group has managed to maintain its profitability amidst challenging business environment.
During the quarter, the Group generated a revenue of RM330.5 million, a six per cent decline year-on-year (“YoY”) from RM353.3 million in the previous year. Its Energy and Information Technology (“IT”) divisions experienced growth in revenue by 36 per cent and nine per cent respectively, while its Technology division faced a reduction in revenue of 26 per cent caused by lower wafer shipments.
The better revenue performance from the Energy division was a result of higher crude oil prices and volume reported during the quarter due to the reinstatement of risers completed end September 2022. In addition, the completion of telecommunication cable work repair projects lifted IT division revenue.
DNeX’s 2Q FY2023 profit before tax (“PBT”) rose by 14 per cent to RM72.0 million, as compared to RM63.4 million posted in the same period last year. This growth is primarily attributed to an almost six-fold increase in PBT from the Energy division, which reached RM80.1 million, from RM13.4 million previously. The Group also benefited from net realised and unrealised foreign exchange gain in the sum of about RM12.2 million as compared to a loss of RM6.1 million last year.
The Group recorded profit after tax (“PAT”) of RM34.5 million as compared to RM64.9 million previously, while profit attributable to shareholders (“net profit”) stood at RM31.9 million from RM43.8 million earlier.
Commenting on the Group’s financial performance, Executive Chairman of DNeX, Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said that “The financial results during the quarter reflect a weaker external demand on the back of recession fears. However, we remain focused on expanding our market presence globally to build resiliency and sustain growth in the long term, despite the challenging economic conditions. We are committed to leveraging our strengths and capabilities to deliver value to our stakeholders, and we believe that our diversified portfolio and strategic initiatives will enable us to weather the current uncertainties and emerge stronger in the future.”
“In our Technology division, concerns over a global economic downturn have led to inventory adjustments, resulting in the short-term fluctuations in demand for semiconductors. Consequently, wafer shipment volume has been impacted as customers have reduced their orders in response to projected demand. The Group anticipates wafer shipment volume to normalise in the near-term, primarily due to the commitment of delivery volumes from our three Long-Term Agreement (“LTA”) customers.”
He added that the Energy division, under Ping, has established its footprint in Malaysia and broadened its portfolio of oil and gas (“O&G”) assets with the two Production Sharing Contracts signed with Petroliam Nasional Berhad (PETRONAS”) for the development and production of oil and gas (“O&G”) resources in offshore Terengganu and Sarawak. These new assets will diversify Ping’s portfolio with long term growth opportunities and varying risk profiles. The Group will leverage on its track record of being a low-cost upstream producer of late-life assets and innovator in marginal field development to maximise the economic potential of these assets.
To strengthen the IT division, the Group is leveraging on advanced technologies such as artificial intelligence and big data analytics to expand its digital capabilities. Efforts are being made to introduce new Business-to-Business (“B2B”) services under Trade Facilitation and to grow the orderbook of Technology Consulting and System Integration projects to improve market share in the public and private sectors, both locally and internationally.
For the six-month period ended 31 December 2022 (“6M FY2023”), revenue increased by 20 per cent to RM750.1 million, up from RM624.2 million. However, due to a one-off negative goodwill of RM264.5 million in the corresponding period of the previous year (“6M FY2022”), the PBT for 6M FY2023 was lower at RM153.1 million, compared to RM362.3 million in 6M FY2022. Excluding the one-off negative goodwill, 6M FY2023 PBT is higher at RM153.13 million, compared to RM97.8 million in 6M FY2022.
In 6M FY2023, DNeX achieved a PAT and net profit of RM102.7 million and RM73.6 million, respectively.
The Group demonstrated strong financial management as evidenced by a net cashflow from operating activities of RM131.8 million generated in 6M FY2023. Furthermore, DNeX maintains a solid balance sheet remains with total cash of RM906.6 million, while total loans and borrowings declined by RM24.1 million to RM295.2 million as at 31 December 2022.