KUALA LUMPUR (Sept 24): Dagang NeXchange Bhd (DNeX) recorded a net profit of RM116.73 million for its sixth quarter ended June 30, 2021 (6QFY20/21), on a revenue of RM45.9 million.
In a statement Friday, DNeX said it reported a 54 times jump in quarterly net profit, as compared with the RM2.15 million it made in the immediate preceding quarter ended March 31 (5QFY20/21), mainly because of a fair value of oil reserves and goodwill from its acquisition of Ping Petroleum Ltd.
No comparative year-ago figures were provided due to the group's change in financial year end from Dec 31 to June 30.
According to DNeX, its information technology and e-services operations remained the group’s main revenue contributor, amounting to RM30.14 million or 65.7% of its total 6QFY20/21 revenue. Its energy segment accounted for the remaining 34.3% or RM15.76 million revenue it made in 6QFY20/21.
For the cumulative 18-month period ended June 30, 2021, DNeX registered a net profit of RM119.98 million, on a revenue of RM330.5 million.
DNeX group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said the group’s immediate priority was to remain resilient whilst addressing the Covid-19 economic impact during the year under review.
“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,” he said.
Syed Zainal Abidin added that the consolidation of SilTerra and Ping’s financial performance will significantly impact the group’s performance positively in the current financial year ending June 30, 2022 (FY22). He noted further that DNeX expects to see their positive contribution from 1QFY22 onwards, following the recent acquisition completion of both companies.
“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 US$70 per barrel,” he said.
Meanwhile, DNeX said the group 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, DNeX said 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 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 contributions such as the recently clinched US$400 million multi-year contract from ChipOne Technology.
On the group's energy business, DNeX said 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% stake in Avalon not owned by Ping.
Looking ahead, DNeX viewed the re-opening of the economy and rapid pace of digitalisation are expected to augur well for the group’s existing business in trade facilitation as well as technology consultancy and system integration business.
“In tandem with the recovery of trade volume and increase in global IT spending, the group will be enhancing its trade facilitation related e-services 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,” it added.
On Friday's market close, DNeX’s share price fell 2.41% or two sen to 81 sen, which gave the group a market capitalisation of RM2.5 billion. In the past one year, the stock has risen 350%.