DNEX 4456 DAGANG NEXCHANGE BERHAD 1Q net profit slumps 86% due to absence of SilTerra bargain purchase effect

 DNEX 4456 DAGANG NEXCHANGE BERHAD 1Q net profit slumps 86% due to absence of SilTerra bargain purchase effect

KUALA LUMPUR (Nov 25): Dagang NeXchange Bhd (DNeX) posted an 86% year-on-year decline in net profit for the first quarter ended Sept 30, 2022 (1QFY2023) due to the absence of one-off bargain purchase effect from the acquisition of 60% interest in SilTerra Malaysia Sdn Bhd.

During the acquisition of SilTerra, DNeX recorded a RM264.51 million gain from bargain purchase in 1QFY2022, boosting its net profit to RM293.56 million or 9.81 sen per share.

With the high base effect, net profit for the quarter under review fell to RM41.72 million or 1.32 sen per share.

Revenue grew 55% to RM419.58 million for 1QFY2023, from RM270.87 million a year ago, thanks to the consolidation of results from SilTerra, a semiconductor wafer foundry.

In view of the global economic uncertainties ahead, DNeX group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said the group will focus on optimising costs while maximising business value to ensure long-term sustainability.

"Furthermore, the strengthening of the US dollar is favourable to the group with more than 80% of the group's revenue transacted in US dollar. Particularly at SilTerra, we will continue to focus on investing in new emerging technologies that command higher average selling prices for long-term sustainability," he said.

Syed Zainal Abidin said DNeX's energy division is also expected to benefit from stabilising Brent crude oil prices over the near term on the back of Russian oil sanctions and production cuts by OPEC+.

"We are keen to unlock the remaining economic reserves through infill drilling and facility de-bottlenecking. We are confident that our energy business, anchored by Ping Petroleum Ltd, will continue to grow as a Malaysian-led company and expand and unlock the potential of other assets within the UK and Southeast Asia region," he added.

Shares of DNeX gained 1.5 sen or 2.4% to 63.5 sen per share as of noon market break on Friday (Nov 25), valuing it at RM2 billion.

http://www.theedgemarkets.com/article/dnex-1q-net-profit-slumps-86-due-absence-silterra-bargain-purchase-effect