DNeX earnings rise on goodwill, fair value gains

by TMR / pic by TMR FILE

DAGANG NeXchange Bhd (DNeX) posted a net profit of RM116.73 million for the sixth quarter of 18-month financial period ended June 30, 2020/2021 (6QFY20/FY21) mainly attributed to a fair value gain of oil reserves and goodwill from the acquisition undertaken by subsidiary Ping Petroleum Ltd. 

Revenue for the period stood at RM45.9 million, the company stated in a filing to Bursa Malaysia yesterday. 

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

DNeX’s information technology and eServices operations remained its main revenue contributor, amounting to RM30.14 million or 65.7% of total revenue in the 6QFY20/FY21. 

The remaining revenue was contributed from the energy segment, accounting for 34.3% or RM15.76 million in 6QFY20/FY21. 

For the cumulative 18 months period ended June 30, 2021, DNeX registered a revenue of RM330.5 million and net profit of RM119.98 million respectively. 

“We embarked on strategic investments in SilTerra Malaysia Sdn Bhd and Ping, which puts us in a strong position to capitalise on the robust semiconductor industry and ride on the recovery cycle of the oil and gas industry,” Tan Sri Syed Zainal Abidin Syed Mohamed Tahir (picture), Group MD of DNeX stated in a release last Friday.

He added that the consolidation of SilTerra and Ping’s financial performance will significantly impact the group’s performance positively in the current FY22. 

“With the recent acquisition completion of both companies, we expect to see their positive contribution from 1Q22 onwards. The group is optimistic SilTerra will grow at a strong pace with higher average selling prices, due to the current semiconductor chip shortage and increasing demand for semiconductor chips in a post-Covid-19 environment. 

Ping will continue to benefit from crude oil prices currently trading at levels above US$70 (RM293.30) per barrel,” he said. 

DNeX and its partner Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Centre (limited partnership) will continue to inject funding for capital expenditure to enhance SilTerra’s competitive edge. 

The Group is also working towards securing more long-term contracts that provide steady revenue contributions such as the recently clinched USD400 million multi-year contract from ChipOne Technology. 

For the group’s energy business, Ping is expected to yield better operating performance in tandem with stronger crude oil prices. 

DNeX is now exploring opportunities to unlock its untapped potential and maximise economic value from its asset portfolio by rejuvenating existing wells to monetise economically attractive reserves in the Anasuria Cluster, which has estimated proved and probable reserves of about 26.6 million barrels of oil equivalent, the company stated. 

DNeX shares closed the trading week at 81 sen, valuing the company at RM2.5 billion.