Apex Equity net profit shrinks 83% in 2Q22


APEX Equity Holdings Bhd saw its net profit for the second quarter ended June 30, 2022 (2Q22), slump 83.34% to RM986,000 from RM5.92 million a year ago, on the back of lower revenue.

The capital market company’s revenue for the quarter fell 42.69% to RM7.76 million from RM13.54 million in 2Q21, according to its filing to Bursa Malaysia yesterday.

As a result, Apex Equity registered lower earnings per share (EPS) of 0.49 sen for the period against 2.92 sen previously.

For the six months period ended June 30, 2022, the company’s net profit fell 68.76% to RM3.43 million from RM10.98 million a year ago, while revenue declined 41.27% to RM17.62 million from RM30 million due to lower brokerage income on lower securities transactions.

On a segmental basis, Apex Equity said its stock and futures broking segment’s profit before tax decreased 68% to RM4.49 million compared to RM13.83 million in the corresponding period due to lower brokerage income on lower securities transactions and lower reversal of impairment loss on doubtful debts of RM0.50 million.

The company’s property holding and property development segment’s profit before tax increased 20% to RM0.78 million from RM0.65 million in the corresponding period due to higher interest income.

Meanwhile, its investment holding and other segments recorded a loss before tax of RM0.36 million compared to a profit of RM0.13 million previously due to higher expenses and the absent of interest income of RM0.32 million from the deposit placed for the proposed merger (which was discontinued on April 15, 2021).

Looking ahead, Apex Equity said the war in Ukraine and the de-coupling of Russia from major economies are expected to cause disruptions and slow down the global economy and generate high inflationary risks.

It said Malaysia’s growth will probably be adversely affected by external conditions, despite the higher market prices for some of its exports, such as crude oil and palm oil.

Additionally, it noted that the Malaysian equity market has been subdued for the past quarters due to weak sentiment and this trend is expected to continue into the next quarter.

“Amid the adverse business environment, the group envisages a challenging outlook for the quarter ahead.

“Nevertheless, the group is cautiously optimistic that the stockbroking business will remain profitable,” it said.

Apex Equity has also embarked on internal restructuring and reactivating certain business activities which were previously inactive.

With the ongoing restructuring exercise and revival of some of the business activities, the group is hopeful that this will bring positive results in the future.

Shares of Apex Equity closed one sen or 0.92% lower at RM1.08 yesterday, giving it a market capitalisation of RM230.65 million.