KUALA LUMPUR (May 21): Dagang NeXchange Bhd (DNeX)’s net profit for the first quarter ended March 31 (1QFY19) fell 26.50% to RM11.93 million from RM16.24 million a year ago, on lower earnings from its core business segments, it said in a Bursa Malaysia filing today.

Quarterly revenue decreased by 3.03% to RM68.95 million, from RM71.11 million a year ago.

Earnings per share for the quarter decreased to 0.68 sen, from 0.93 sen in the corresponding quarter last year.

Revenue from its trade facilitation and e-Commerce segment decreased 15% to RM20.1 million, from the RM23.9 million in FY18, while trade traffic volume decreased by 6.3% in 1QFY19.

This resulted in a lower profit before tax of RM7.4 million, down 7.5% from RM8 million reported a year ago.

In addition, its energy division continues to see competitive pressure from the decline in oil and gas activities.

However, the segment saw a 68% increase in profit before the tax to RM7.2 million, from RM4.3 million, due to higher upstream exploration and production activities.  

However, it noted that its system integration and consultancy business saw a 5% uptick in revenue during the quarter to RM37.2 million from RM35.4 million previously, due to progress billings for work done on the submarine cable installation and repair project in Indonesia, worth RM7.7 million.

In spite of this, the segment recorded lower profit before tax of RM3.1 million in 1QFY19, from RM17.3 million reported a year prior, as a result of lower profit  from subsidiary Genaxis Group of RM3.1 million, from RM19.2 million in 1QFY18, due to one-off accounting adjustments for the Integrated Government Financial & Management System (iGFMAS) project cost, over provided in prior years.

A lower revenue of RM24 million was recognised from its Genaxis Group in 1QFY19, from RM28.6 million previously, as the development of the iGFMAS was at its final stage, the filing added.

“The Group continues to aggressively pursue its group-wide operational cost optimization programme, driving towards achieving improvements in operational efficiency and business profitability. based on a sustainable cost structure. At the same time, the group is focusing on the implementation of planned new initiatives targeted to develop sustainable revenue lines,” DNex said.

“Barring any unforeseen circumstances, the Group expects to deliver positive results for the year 2019,” it added.

The counter closed 1.96% or half a sen down to 25 sen — with 2.10 million shares traded — giving it a market capitalisation of RM439.51 million.