by SHAZNI ONG/ pic by TMR FILE
ANCOM Bhd expects its agrichemical division to be a key earnings driver for the financial year ending May 31, 2021 (FY21), after a challenging year for the agrochemical industry.
“For the agrochemical division, we have an improved agrichemical outlook in the US, now that the weather has stabilised. In FY19, a lot of our customers had very high levels of inventory.
“The Movement Control Order period caused transportation issues but led to depletion of inventories held by customers, so we are expecting a replenishment drive from our key customers from the US and Africa. Our top two export markets namely Brazil and the US are showing a strong demand recovery,” Ancom group CEO Lee Cheun Wei (picture) said at the company’s investor briefing and business updates via Zoom on Monday.
Ancom customers include sugarcane, cotton and palm oil plantations with such industries being largely left intact throughout the pandemic lockdown worldwide.
“Demand from Australia is improving as the drought is ending. We have some new products to roll out as part of our new artificial intelligence portfolio,” he said.
Last month, Ancom posted a net loss of RM11.8 million compared to a net profit of RM10.18 million for the fourth quarter ending May 31, 2020, due to lower revenue caused by the impact of the Covid-19 pandemic, coupled with one-off impairments of RM5.5 million for goodwill and RM3 million for investments in associates in the quarter.
Revenue for the quarter fell 35.54% year-on-year (YoY) to RM309.45 million on weaker sales in Ancom’s industrial chemical division due to lower demand and product prices.
For the full year, Ancom recorded a net loss of RM9.7 million compared to a net profit of RM15.13 million, while revenue dropped 25.9% YoY to RM1.47 billion.
Ancom’s shares closed 7.5 sen higher to 93 sen yesterday, valuing the company at RM218 million.