Cyberjaya, 27 May 2022 – Dagang NeXchange Berhad (“DNeX”) has chalked up an impressive financial performance for the third quarter ended 31 March 2022 (“3Q FY2022”).
The new Technology and Energy segments continued to be the main earnings contributor to the Group, underpinned by DNeX’s strategic investments in SilTerra Malaysia Sdn Bhd (“SilTerra”) and Ping Petroleum Limited (“Ping”).
For the quarter under review, DNeX posted a revenue of RM382.6 million, of which the new Technology segment that included SilTerra, stood as the largest contributor at RM232.1 million, accounting for 60.7 per cent of total revenue. This was followed by the Energy segment with RM102.9 million in revenue or 26.9 per cent while the remaining RM47.6 million or 12.4 per cent was from the Information Technology (“IT”) segment.
There are no year-on-year comparative figures due to the change in the financial year-end from 31 December to 30 June.
On a quarter-on-quarter basis, the Group’s 3Q FY2022 revenue rose 8.3 per cent to RM382.6 million from RM353.3 million, while PAT increased 19.9 per cent to RM77.8 million from RM64.9 million recorded in the preceding quarter ended 31 December 2021 (“2Q FY2022”).
The increase in revenue and PAT were mainly driven by improved financial performances in the Technology and Energy segments. This was largely due to increase in sale of semiconductor wafers, and higher average selling prices (“ASPs”) of wafer and crude oil.
For the nine-month period ended 31 March 2022 (“9M FY2022”), DNeX recorded a revenue and PAT of RM1.01 billion and RM444.2 million respectively. Included in the Group’s PAT was a one-off gain effect from business combination on the acquisition of SilTerra amounting to RM264.5 million in 1Q FY2022.
“We are pleased to announce a robust set of financial results for 3Q FY2022 despite the geopolitical uncertainty and volatility affecting global markets. This is a result of the Group’s resilience and relentless pursuit to focus on strategies that improve bottom-line performance,” said Group Managing Director of DNeX, Tan Sri Syed Zainal Abidin Syed Mohamed Tahir.
“We are confident SilTerra will continue to benefit from the extended global semiconductor industry upcycle, supported by multiple long-term wafer supply agreements (“LTAs”) and shift in product mix to include new technologies that are geared towards data centres, 5G networks and life sciences applications. In addition, the planned expansion to ramp up SilTerra’s annual production capacity by 10 per cent by early 2023 will translate to better economies of scale, with further improvement in manufacturing cost,” he said.
He added that as part of its long-term plans to enhance business sustainability, the Group is exploring new opportunities to expand its semiconductor fabrication capabilities and address the strong global demand for semiconductors. The Group’s memorandum of understanding (“MoU”) with Big Innovation Holdings Limited (“BIH”), a wholly-owned subsidiary of Hon Hai Precision Industry Co Ltd (“Foxconn”) to build and operate a new 12-inch wafer fabrication plant operating to produce 40,000 wafers per month, encompassing the manufacturing of 28-nanomometer and 40-nanometer technologies will also complement the Group’s existing investment in SilTerra, in areas such as best practices and technology excellence.
Meanwhile, Brent crude oil prices trading at the US$100 per barrel price range augurs well for O&G upstream producer Ping, which has an average cost of production of below US$30 per barrel. To benefit from the current strong oil prices, capacity enhancement work programmes are underway to unlock remaining economic reserves at Anasuria cluster through improved operations and infill drilling. Production from Ping’s second oilfield asset, Avalon Oil Development, which has total estimated recovery of 23 million barrels of oil is scheduled to begin between mid 2024 and mid 2025.
Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said Malaysia’s transition into endemicity with the reopening of its international borders from April 1, 2022, will pave the way for the nation’s economic recovery. This augurs well for the Group’s business in Trade Facilitation as well as Technology Consulting and Systems Integration as DNeX continues to broaden its offerings in both Business-to-Government and Business-to-Business segments to fulfil the growing needs for digitalisation solutions that also include expanding beyond Malaysian shores.
In 9M FY2022, DNeX generated a strong net cashflow from operating activities amounting to RM551.1 million. The Group’s balance sheet remains healthy as it is in a net cash position with total cash of RM1.05 billion, exceeding total loans and borrowings of RM305.2 million as at 31 March 2022.