Cyberjaya, 29 May 2023 – Dagang NeXchange Berhad (“DNeX”) achieved a “normalised” net profit of RM17.8 million for its third quarter ended 31 March 2023 (“3Q FY2023”).

The quarterly results were impacted by one-off non-operational adjustments which consisted of:

• Non-cash deferred tax liability expenses due to the enactment of the Energy Profit Levy (“EPL”) by the UK Government of RM252.4 million;
• Impairment of assets in relation to the submarine cable laying vessel equipment namely remotely operated vehicle (”ROV”) and plough amounting to RM23.3 million; and
• Reversal of deferred tax assets of SilTerra Malaysia Sdn Bhd of RM12.3 million.

Revenue for the quarter under review stood at RM276.7 million, compared with RM382.6 million in the same quarter last year (“3Q FY2022”). The Technology division recorded a revenue of RM128.5 million, compared with RM232.1 million in 3Q FY2022, primarily due to lower wafer shipments. Revenue from the Energy division was slightly higher at RM103.7 million, compared with RM102.9 million in the same quarter last year. The Information Technology (“IT”) division's revenue eased to RM44.5 million from RM47.7 million earlier.

Executive Chairman of DNeX, Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said, “While our subsidiary Ping Petroleum Limited in our Energy segment delivered a solid performance, it was subsequently burdened with non-cash deferred tax liability expenses arising from the EPL. Nevertheless, this is expected to be gradually and completely reversed during the EPL regime period, which ends on 31 March 2028.”

“All our divisions are in a good place and we are starting to see early signs of recovery and demand uptick within the semiconductor industry. With the completion of the capacity expansion, we will enhance production of emerging technologies to improve average selling prices and profitability. Our focus remains on enhancing manufacturing efficiency and cost effectiveness by streamlining our customer base, concentrating on those who require large volumes.”

He added that in line with Ping’s strategy of diversifying its oil and gas (“O&G”) asset portfolio across geographical locations, the Group will focus on developing its Malaysian O&G assets, starting with the Meranti Cluster, a brownfield asset offshore Kuala Terengganu. The Group will capitalise on its expertise in managing late-life brownfield O&G assets and is confident of replicating its business model, which has been effective at the Anasuria Cluster in the North Sea, United Kingdom.

In the IT division, the Group will build upon its successful completion of nationally critical, large-scale IT projects for the Malaysian Government, such as iGFMAS (“Government Financial Management Accounting System”) and the Inland Revenue Board of Malaysia’s tax self-assessment system to seek participation in several large public sector digitalisation projects. Furthermore, the Group’s collaboration with MIMOS Berhad enables DNeX to explore opportunities in Government projects and initiatives to expand in new technology areas, such as software development, network systems, cloud computing and the Fourth Industrial Revolution (“IR 4.0”).

For the nine-month period ended 31 March 2023 (“9M FY2023”), revenue stood at RM1.027 billion, slightly higher than RM1.007 billion in the corresponding period of the previous year (“9M FY2022”). In 9M FY2023, DNeX recorded a “normalised” net profit of RM91.4 million, after adjusting for the one-off non-operational adjustments incurred in 3Q FY2023.

The Group generated a net cashflow from operating activities of RM182.8 million in 9M FY2023. DNeX remains in a positive net cash position with total cash of RM824.0 million exceeding total borrowings of RM282.1 million as at 31 March 2023.