Hextar Global posts lower earnings in 3Q due to supply chain issues

Demand for agrochemical products has been increasing but delivery has been delayed due to bottlenecks in the supply chain

by NURUL SUHAIDI / Pic credit: hextarglobal.com

HEXTAR Global Bhd’s net profit fell to RM7.2 million in its third quarter (3Q) ended Sep 30, 2021 compared to RM12.45 million posted in the same quarter last year as global supply chain disruption caused shortages and price hikes of raw materials across industries.

Revenue in the period improved by 0.9% year-on-year to RM112.55 million.

In the Bursa filing yesterday, Hextar Global stated the increase was mainly driven by consolidation of financial results of newly acquired specialty chemicals business.

The chemical group noted that despite the challenges in the global business environment due to the Covid-19 pandemic, the industry continues to show resilience and growth.

For the nine months of 2021 period, Hextar Global recorded a profit before taxation of RM35.16 million as against RM41.89 million in the same period in 2020.

“The decreased of RM6.73 mil or 16.1% was mainly due to higher cost of goods sold and operating expenses,” it stated.

ED Datuk Eddie Ong Choo Meng noted that demand for agrochemical products has been increasing but delivery has been delayed due to bottlenecks in the supply chain.

He added the group is aware a key contributor to business sustainability is to diversify.

In this respect, the group completed the acquisition of Nobel Synthetic Polymer Sdn Bhd and Nobel Scientific Sdn Bhd on Nov 18.

Together with Alpha Aim (M) Sdn Bhd and Chempro Technology (M) Sdn Bhd, these companies are expected to contribute positively to future earnings of Hextar Global as it expanded into the specialty chemical sector.

Hextar Global’s share price closed unchanged at RM1.48 yesterday.