ANCOM Nylex Bhd, an integrated chemical group, posted a 31% drop in net profit for the second quarter ending Nov 30, 2024 (2Q25).
The company’s net profit fell to RM15.16 million, down from RM22.12 million in the same quarter the previous year.
The decline was primarily driven by higher freight costs and significant foreign exchange (forex) fluctuations that impacted its gross profit margin.
However, profits from the logistics and polymer divisions provided some relief.
As a result, earnings per share for 2Q25 decreased to 1.26 sen, compared to 2.33 sen in 2Q24.
Revenue for the quarter declined 11% to RM450.71 million, from RM505.16 million in 2Q24, largely due to lower contributions from the industrial chemical division, which experienced reduced prices and order volumes.
The company did not propose or recommend any dividends for the latest financial quarter.
For the 1H25, net profit fell 34% to RM28.37 million, compared to RM42.92 million in the previous year.
Revenue for the period also dropped by 3%, from RM992.52 million in 1H24 to RM966.25 million.
Ancom Nylex’s MD and CEO Datuk Lee Cheun Wei acknowledged the impact of macroeconomic challenges on the group’s performance in 1H25 but noted positive developments: “Freight costs had been trending downwards and forex movements had somewhat stabilised.”
He expressed optimism for the second half of the fiscal year, adding: “More importantly, the sales volume for our agri-cultural chemical segment has been healthy, and we expect this demand to continue in the coming quarters, as we advance towards a brighter 2H25.”
Lee also pointed to improved financial health, saying: “Separately, our financial position is improving as part of our efforts to strengthen our balance sheet. This provides us with a stronger backing and perhaps opportunities for synergistic mergers and acquisitions.”
The company’s net gearing reduced to 0.13 times at the end of November 2024, down from 0.44 times at the end of August 2024, with total borrowings decreasing to RM248.9 million from RM360 million over the same period.
In a separate filing with Bursa Malaysia, Ancom Nylex highlighted ongoing challenges in the global supply chain, particularly in light of geopolitical risks.
The company noted: “The conflict in the Middle East has caused seaborne trade to be rerouted, while higher-than-expected demand and weather have also increased shipping costs, adding to shipping times and snarled travel. These factors may affect the businesses of the group for the remainder of the financial year ending May 31, 2025.”
Despite these challenges, the company expressed confidence in its ability to manage risks and continue pursuing growth opportunities, stating: “Barring any unforeseen (circumstances), the group should perform satisfactorily for the remaining of the financial year.” — TMR
- This article first appeared in The Malaysian Reserve weekly print edition