- Performance driven by higher wafer shipment and full three-month consolidation of SilTerra
- Declares 0.6 sen dividend
Cyberjaya, 24 February 2022 – Dagang NeXchange Berhad (“DNeX”) has continued its growth trajectory with a strong set of financial results for the second quarter ended 31 December 2021 (“2Q FY2022”).
Following this, its Board of Directors has recommended an interim dividend of 0.6 sen per share under the single-tier system totaling RM18.9 million for the quarter. Both entitlement date and payment date will be announced later.
There are no year-on-year comparative figures due to the change in the financial year end from 31 December to 30 June.
On a quarter-on-quarter basis, the Group’s 2Q FY2022 revenue increased by 30.4 per cent to RM353.3 million as compared to RM270.9 million in the preceding quarter ended 30 September 2021 (“1Q FY2022”).
The significant increase in financial performance is mainly attributed to higher wafer shipments by SilTerra Malaysia Sdn Bhd (“SilTerra”) which resulted in a 49.7 per cent increase in revenue from the Technology segment to RM222.7 million as compared to RM148.8 million earlier. In addition, three months of SilTerra’s financial results were fully consolidated during the quarter as compared to only two months in the preceding quarter.
Revenue from the Energy segment increased by 6.8 per cent to RM83.3 million supported by sustainable level of oil price and higher demand for gas during the winter season whilst revenue from the Information Technology segment rose by 7.3 per cent to RM47.3 million.
During the quarter, the Group reported profit after tax (“PAT”) of RM64.9 million, bringing its six months ended 31 December 2021 (1H FY2022) PAT to RM366.4 million. For 1Q FY2022, the Group’s PAT was RM301.5 million, mainly attributed to one off gain effect from business combination on the acquisition of SilTerra amounting to RM264.5 million.
“We are pleased to continue our growth trajectory with strong financial performance in 2Q FY2022, mainly derived from the successful outcomes of the on-going transformation in SilTerra. In December 2021, we achieved the highest quantity of total wafer shipments ever reported in the history of SilTerra. The future growth prospects at SilTerra remain bright as the Group continues to expand production capacity and enhance operational efficiencies. SilTerra is increasing its annual production capacity by 20 per cent to 10 million mask layers annually where the additional capacity is expected to be ready for production by early 2023,” said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX.
Upon completion, he said more capacity can be allocated in new emerging technologies such as microelectromechanical systems (“MEMS”) and Silicon Photonics devices which have higher average selling prices. The expansion in production capacity will also translate to better economy of scale, with lower manufacturing cost.
On the back of the significant rise in Brent crude oil prices which has surpassed USD100 per barrel, a level unseen since 2014, oil and gas (“O&G”) upstream producer Ping Petroleum Limited (“Ping”), which has a low cost of production of USD26 per barrel, directly benefits due to higher average selling prices, resulting in an increase in profitability, he said.
“Higher average selling prices allow us to accelerate our profit enhancement activities to further improve our financial performance in the near term. These include debottlenecking and drilling of infill wells to increase production rates, optimising operating expenses (“OPEX”), better tax management through capital expenditure (“CAPEX”) planning and extension of the Cessation of Production (“CoP”) date,” he said.
“In addition, higher oil prices will also spur activities across the O&G upstream and downstream sector. This augurs well for OGPC, which is a service provider and distributor of technical products and equipment for the O&G sector,” he added.
According to Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, the COVID-19 pandemic has accelerated the pace of digitalisation in both the private and public sectors which bodes well for the Group’s existing business in Trade Facilitation as well as Technology Consulting and System Integration.
“With the aim to enhance the Group’s position as the preferred and trusted technology partner, DNeX will continue broadening its e-Services offerings in both Business-to-Government and Business-to-Business segments to fulfil the growing needs for digitalisation solutions which also include expanding beyond Malaysian shores. The global economic recovery is well underway as countries gradually progress into endemic phase following the mass vaccination rollout in many parts of the world,” he said.
DNeX has a healthy balance sheet and generated a strong net cashflow from operating activities amounting to RM412.9 million in 1H FY2022. The Group is in a net cash position with total cash of RM978.3 million exceeding total borrowings of RM315.9 million as at 31 December 2021.