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Singapore Investment


 DNEX 4456 DAGANG NEXCHANGE BERHAD posts strong FY22 earnings driven by investments in SilTerra Malaysia, Ping Petroleum

Dagang NeXchange Bhd's (DNeX) registered a net profit of RM549.6 million for the financial year ended June 30, 2022 (FY22), on the back of RM1.44 billion in revenue.

KUALA LUMPUR: Dagang NeXchange Bhd's (DNeX) registered a net profit of RM549.6 million for the financial year ended June 30, 2022 (FY22), on the back of RM1.44 billion in revenue.

This is mainly attributed to the company's technology business, underpinned by its strategic investments in SilTerra Malaysia Sdn Bhd (SilTerra), followed by energy via Ping Petroleum Ltd (Ping) and information and technology (IT) businesses.

DNeX's technology business has emerged as the biggest contributor to the company, with RM857.7 million, accounting for 60 per cent of total revenue.

This was followed by the energy business with RM379.6 million in revenue, or 26 per cent, while the IT business contributed the remaining RM199.9 million or 14 per cent.

For FY22, DNeX generated a strong net cash flow from operating activities amounting to RM643.8 million.

The company's balance sheet remains solid with total cash of RM1.02 billion, while total loans and borrowings stood at RM319.3 million as of June 30, 2022.

There are no year-on-year comparative figures due to the change in the financial year-end from December 31 to June 30, 2022.

For the fourth quarter (Q4) ended June 30, 2022, DNeX recorded a net profit of RM160.6 million, while revenue increased 12 per cent to RM430.3 million from RM382.6 million recorded in the same period previously.

Group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said transformation efforts at SilTerra have led to a strong turnaround in the company's financial performance.

He said this was supported by higher average selling prices (ASP) and operational improvements in production output, quality control and manufacturing efficiency.

"As we enter the new financial year, SilTerra will continue to pursue manufacturing excellence and superior technological innovation.

"The three long-term agreements secured with major clients will fulfil capacity utilisation by more than 70 per cent.

"Expansion efforts to increase SilTerra's annual production capacity by 10 per cent is a work in progress and expected to be completed in the first half of 2023," he said, adding that as a result, more capacity will be allocated to new emerging technologies such as microelectromechanical systems (MEMS) and Silicon Photonics devices, which command higher ASP.

Meanwhile, Syed Zainal said the Malaysian economy has accelerated due to stronger domestic demand, normalising economic activities and reopening international borders.

He said this augurs well for the company's businesses in trade facilitation, technology consulting, and systems integration.

"Having secured the contract extension, the company will continue to operate the National Single Window (NSW) for trade facilitation until August 31, 2024.

"Our new trade facilitation-related service offerings, especially in the business-to-business (B2B) segment locally and in international markets, are gaining traction and are currently in the pilot implementation phase," he added.


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