KUALA LUMPUR (May 15): Hexza Corp Bhd’s net profit jumped 73.6% to RM2.31 million for the third quarter ended March 31, 2015 (3QFY15), from RM1.33 million a year ago, thanks to improved results of the resins division amidst lower production cost.

Hexza’s (fundamental:1.45; valuation:2.6) 3QFY15 revenue rose marginally by 0.88% to RM35.85 million, versus RM35.54 million the previous year.

For the nine months ended March 31, its profit surged 116% to RM10.74 million, from RM4.96 million last year, while cumulative revenue stood at RM113.01 million, against RM103.26 million a year ago.

Hexza involves in manufacturing operations for range of formaldehyde based resins, ethyl alcohol, Liquefied Carbon Dioxide, Kaoliang Wine and natural fermented vinegar.

Increase in sales volume has boosted ethanol division’s turnover from RM11.13 million to RM14.24 million. But the positive impact was nullified by the drop in turnover of the resins division from RM23.49 million to RM20.71 million, because of the decline in sales volume and average selling price, Hexza said in the filing.

Its investment segment recorded lower profit before tax due to loss on disposal of quoted investment, while the turnover of its trading segment was 31.3% lower and profit before tax decreased to RM0.07 million, mainly due to drop in sales volume by 36.6%.

Moving forward, Hexza said the group’s operating environment continues to be challenging and competitive for the fourth quarter.

“However the board expects the performance for the remaining quarter to be satisfactory and the performance for the current financial year will be significantly better than that achieved in the previous financial year ended June 30, 2014,” it added.

Hexza's share price closed at 87.5 sen today, up 0.5 sen or 0.57%, giving it a market capitalisation of RM174.33 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)