KUALA LUMPUR (July 18): Ancom Nylex Bhd (formerly known as Ancom Bhd) had a bumper profit year in the financial year ended May 31, 2022 (FY22).

The chemical group's net profit for the fourth quarter ended May 31, 2022 (4QFY22) climbed more than four times or 330% to a record high of RM31.92 million from RM7.42 million in the same period last financial year mainly on improved sales performances by its industrial chemicals and agricultural chemicals divisions.

Quarterly revenue grew 26.8% to RM565.45 million from RM445.89 million in the previous financial year's corresponding quarter. Earnings per share (EPS) shot up to 12.61 sen from 3.11 sen previously, its bourse filing showed on Monday.

Ancom Nylex's industrial chemicals division posted a higher revenue of RM405.7 million compared with RM325.1 million in the corresponding quarter last financial year, mainly attributable to higher sales volume and selling prices.

Meanwhile, its agricultural chemicals division also reported a sharp rise in revenue to RM115.4 million for the financial quarter under review compared with RM79.7 million in the corresponding quarter in the previous financial year, mainly attributable to higher sales volume.

On a quarterly basis, the company's net profit soared 110% from RM15.14 million in the immediate preceding quarter, while revenue increased almost 11% from RM510 million in 3QFY22. 

For the full FY22, Ancom Nylex's net profit more than doubled to RM68.18 million, up 187% from RM23.75 million a year ago. Annual revenue jumped nearly 31% to RM2.01 billion from RM1.54 billion. EPS expanded to 26.93 sen versus 9.97 sen in FY21.

Nonetheless, Ancom Nylex's share price has been on a downtrend since March, falling from RM1.35 on March 3 to 89.5 sen on Monday, giving it a market capitalisation of RM813 million.

Ancom Nyxle managing director and group chief executive officer Lee Cheun Wei in a separate statement explained that growers of major crops are placing higher importance on proper crop management as the world continues to focus on food security.

"Higher selling prices for our proprietary products due to strong demand, as well as contributions from two new active ingredient products, boosted our agrichem business, whereas the elevated crude oil prices lifted our industrial chemical segment, which is mainly involved in the trading of petrochemical products," he said.

Looking ahead, Lee noted the group is currently expanding the production capacity for its existing agrichem active ingredients portfolio to cope with the surging demand from both overseas and local markets.

Meanwhile, Lee said the new facility meant for three more new active ingredient products is completed and is expected to go through manufacturing audits by year end.

Lee added that in FY23 Ancom Nylex will also start reaping the full benefits of the group's successful restructuring exercises, namely, the recent acquisition of the livestock chemicals business and the merger of the industrial chemicals business earlier this year.

"All that said, we are cognisant of a potential global recession amid the restrictive monetary policies being implemented to cope with the rising inflation.

"While the group is not completely immune to external factors, we remain focused on our growth journey which is well supported by the non-discretionary nature of our agrichem segment.

"Demand is rather inelastic and resilient due to our dominant position in this niche agrichem market," he said.