Dagang NeXchange Bhd (DNeX) has announced a strong set of financial results for the second quarter ended 30 June 2017 (“2Q 2017”) on the back of new business income streams.
In 2Q 2017, its revenue increased by 3.6 per cent to RM49.1 million from RM47.4 million in the corresponding quarter last year while net profit rose by 163 per cent to RM11.7 million from RM4.4 million (excluding one-off share of pre-acquisition gain of excess fair value of RM85.3 million from the acquisition in Ping Petroleum Limited).
For the six months period ended 30 June 2017 (“1H 2017”), revenue grew by 25 per cent to RM92.9 million from RM74.3 million a year ago.
DNeX’s net profit in 1H 2017 grew almost threefold to RM26.7 million from RM9.1 million (excluding one-off share of pre-acquisition gain of excess fair value of RM85.3 million from the acquisition in Ping Petroleum Limited).
The improvement garnered in 1H 2017 financial performance is attributed to the consolidation of OGPC Group’s financial performance, new recurring income from the Vehicle Entry Permit and Road Charges (“VEP & RC”) operations and maintenance contract, new income from the processing of eWork Permit, and an increase in oilfield drilling services.
The IT & e-Services division continued to be the main revenue contributor at 66 per cent of the Group’s revenue in 1H 2017 while the Energy division contributed the remaining 34 per cent.
“We remain committed to strengthen our business portfolio and business reach for both our IT & e-Services and Energy divisions and strive to eventually achieve a good balance in terms of earnings contribution from both divisions,” said Zainal Abidin Jalil, Group Managing Director of DNeX.
“In view of the overall market softness of the oil and gas industry, we are exploring more contracting opportunities in the downstream sector. Our recently clinched contract to supply Portable Container Systems for petroleum products worth RM50 million to RM75 million will enhance the earnings growth of our Energy division over the near term. I believe our business fundamentals remain robust and we remain committed to pursue profitable growth,” he added.
The Group’s balance sheet continues to remain healthy and in a net cash position with a cash balance of RM73.4 million while total borrowings of RM17.5 million as at end June 2017.
DNeX’s Board of Directors has also recommended an interim dividend of 0.5 sen per share under the single-tier system totaling RM8.8 million for the current period ended 30 June 2017.