Cyberjaya, 24 September 2021 – Dagang NeXchange Berhad (“DNeX”) has announced its financial results for the sixth quarter of 18-month financial period ended 30 June 2021 (“6Q FY2020/2021”). During the quarter under review, DNeX posted RM45.90 million in revenue and RM116.73 million in profit after tax and non-controlling interest (“PATANCI” or “net profit”).
The Group reported a marginal increase in revenue and 54 times jump in net profit as compared with the preceding quarter ended 31 March 2021. The surge in net profit is mainly attributed to a fair value of oil reserves and goodwill from the acquisition of Ping Petroleum Limited (“Ping”).
There are no comparative figures quarter-on-quarter due to the change in the financial year end from 31 December to 30 June.
DNeX’s IT & eServices operations remained its main revenue contributor, amounting to RM30.14 million or 65.7 per cent of total revenue in 6Q FY2020/2021. The remaining revenue was contributed from the Energy segment, accounting for 34.3 per cent or RM15.76 million in 6Q FY2020/2021.
For the cumulative 18 months period ended 30 June 2021, the Group registered a revenue of RM330.50 million and net profit of RM119.98 million respectively.
“During the year under review, our immediate priority was to remain resilient whilst addressing the Covid-19 economic impact. It was also a year for us to reshape our business portfolio to further expand and strengthen sustainable revenue growth for the Group as we transform our organisation to become a leading and respected industry player. To achieve this, we embarked on strategic investments in SilTerra Malaysia Sdn Bhd (“SilTerra”) and Ping, which puts us in a strong position to capitalise on the robust semiconductor industry and ride on the recovery cycle of the oil and gas (“O&G”) industry,” said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX.
“The consolidation of SilTerra and Ping’s financial performance will significantly impact the Group’s performance positively in the current financial year ending 30 June 2022 (“FY2022”). With the recent acquisition completion of both companies’, we expect to see their positive contribution from 1Q2022 onwards. The Group is optimistic that SilTerra will grow at a strong pace with higher average selling prices (“ASP”), due to the current semiconductor chip shortage and increasing demand for semiconductor chips in a post Covid-19 environment. Furthermore, Ping, an upstream O&G player, will continue to benefit from crude oil prices that are currently trading at levels above USD70 per barrel,” he said.
DNeX and its partner Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) will continue to inject funding for capital expenditure to enhance SilTerra’s competitive edge. Key focus areas will be on removing bottlenecks and improving plant utilisation rate and efficiency.
In addition, higher capacity utilisation, operational efficiency and cost improvement initiatives will continue to be the main targets while streamlining product portfolios will translate into higher margin and better profitability. Efforts in streamlining product portfolios include leveraging on Micro-electromechanical system (“MEMS”) technology and Silicon Photonics (“SiPh”) products to cater to a larger pool of customers. The Group is also working towards securing more long-term contracts that provide steady revenue contribution such as the recently clinched USD400 million multi-year contract from ChipOne Technology.
On the Group’s Energy business, Ping is expected to yield better operating performance in tandem with improved oil prices and is now exploring opportunities to unlock its untapped potential and maximise economic value from its asset portfolio by rejuvenating existing wells to monetise economically attractive reserves in the Anasuria Cluster, which has estimated proved and probable (“2P”) reserves of about 26.6 million barrels of oil equivalent (“MMboe”). The Group also intends to increase its production levels by optimising its current greenfield portfolio, such as Avalon including acquiring the remaining 50 per cent stake in Avalon not owned by Ping.
The re-opening of the economy and rapid pace of digitalisation is expected to augur well for the Group’s existing business in Trade Facilitation as well as Technology Consultancy and System Integration (“Tech Consultancy & SI”) business. In tandem with the recovery of trade volume and increase in global IT spending, the Group will be enhancing its Trade Facilitation related eServices and digital solutions in the Business-to-Government and Business-to-Business segments to further strengthen its position as the preferred technology partner for all sectors.