Categories: BusinessNews

Hextar Global 2Q22 net profit soars to RM15.8m

by AZALEA AZUAR / pic credit: hextargroup.com

CHEMICAL products distributor Hextar Global Bhd’s net profit jumped to RM15.8 million in the period ended June 30, 2022 (2Q22), from RM7.3 million in 2Q21 on the back of stronger revenue.

The group’s revenue for this period rose 49.1% to RM316.3 million from RM213.5 million in 2Q21 supported by its investment strategies and expansion.

On a quarter-to-quarter basis, Hextar Global’s revenue increased by 5.9% from RM153.6 million to RM162.7 million due to the agriculture segment’s better performance although net profits were lower at RM15.8 million from RM16.5 million mainly due to higher operating expenses coupled with foreign-exchange movements. 

According to ED Datuk Eddie Ong Choo Meng, the first half of the year  recorded RM32.3 million in net profits which reflects its expansion and acquisition plans.

“We are now seeing the results of this strategy and I am encouraged by the impact on our 2Q results, even in the face of significant economic headwinds. 

“More importantly, profit margins have continued to improve from 19.4% to 27% for the current quarter and our cash generated from operations remains strong at RM37.2 million,” he said in a statement.

On the other hand, Hextar Global’s consolidated revenue jumped 64.8% to RM162.7 million supported by not only the specialty chemicals segment — which reached RM53.8 million — but also the increasing raw materials prices which caused its selling price to rise.

Revenue increased from the agriculture segment (8.2%) and consumer products segment (56.6%) to RM95 million and RM3.8 million respectively. 

“The use of agrochemicals is essential in present-day agriculture coupled with the increasing population size and rising food consumption, soil degradation, shortage of arable land and consumer awareness of agrochemicals benefits which continue to drive demand. 

We still see significant growth opportunities in the industry, which is why we have always actively invested in research and development to further gain market participation,” Ong added.

Hextar Global has also declared its first interim dividend of one sen single-tier dividend per share for the financial year ending Dec 31, 2022.

During the quarter under review, Hextar Global completed the acquisition of the remaining share capital of Hextar Kimia Sdn Bhd’s two wholly owned overseas subsidiary companies — namely Hextar Kimia (Australia) Pte Ltd and International Chemicals Engineering Pte Ltd — in order to consolidate its foothold in the Australian and New Zealand oil and gas sector.

The group will focus on these two companies to promote Malaysian agrochemical products to foreign markets while also allowing them to add to its capacity and geographic presence in respect of its core businesses. 

It is also able to expand its portfolio mix with respect to its chemicals business to drive its regional growth and margins. 

“As we progress into the remainder of this financial year, we remain focused on our strategic goals and expansion plans. We believe we have taken another step to further position the group to generate sustainable value for our shareholders,” he stressed.

Zukri

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