DNeX 3QFY23 net profit near three-year low

DNeX 3QFY23 net profit near three-year low

KUALA LUMPUR (Nov 27): Technology, energy and IT company Dagang Nexchange Bhd (DNeX) posted a net profit of RM13.3 million for the financial quarter ended Sept 30, 2023, on the back of a revenue of RM327.45 million.

The quarterly performance is the lowest since 2021, when it posted a net profit of RM2.15 million in the financial quarter ended March 31, 2021.

There is no comparative for the quarter under review as the company has changed its financial year end to Dec 31, from June 30.

On a quarter-on-quarter (q-o-q) basis, the group posted a 72% drop in net profit from RM47.51 million in the immediate preceding quarter, 2QFY2023, despite revenue increased 19.1% q-o-q from RM275.02 million.

The lower q-o-q earnings were due to lower contributions from the information technology (IT) segment and corporate segment. IT segment’s profit before tax fell 26.17% to RM16.16 million, from RM21.89 million previously, while the corporate segment’s loss before tax widened to RM4.62 million, from RM4.16 million previously.

For the cumulative 15-month financial period, it incurred a net loss of RM105.35 million on the back of a revenue of RM1.63 billion.

On its outlook, DNeX said it aims to leverage its competitive strengths developed across three core business segments to remain resilient amidst this challenging environment.

For the technology segment, the group said it continues to remain focused on improving its product mix with emerging technologies such as microelectromechanical systems (MEMS) and silicon photonics that carry higher average selling prices and profit margins.

On its energy segment, DNeX said announcements by Opec+ to extend their voluntary oil production cuts is expected to support oil prices, which bodes well for the group given its role as an upstream producer.

Over on its IT segment, the group said its strategic plan involves expanding service offerings by advancing our capabilities and seizing opportunities in new technology areas such as internet of things (IoT), Big Data and analytics.

“This will put us in a strong position when tendering for large-scale IT and digitalisation projects from the public and private sectors, locally and abroad,” it added.

Shares price of DNeX closed down one sen or 2.3% to 42.5 sen, bringing the group a market capitalisation of RM1.34 billion.