KUALA LUMPUR: Dagang Nexchange Bhd shares fell in active trade this morning after announcing lower net profit in the second quarter.
At 11am, DNeX fell nearly three per cent to 51 sen with 31.37 million shares traded.
DNeX’s net profit falls year-on-year year to RM11.93 million in the second-quarter ended June 30 2017, in the absence of a one-off gain a year ago.
DNeX had posted RM89.50 million net profit in the second quarter in 2016, fuelled by the one-off share of pre-acquisition gain of excess fair value of RM85.3 million from the completion of acquisition in PING Petroleum Ltd recognised during the quarter.
In an exchange filing yesterday, DNeX said its revenue increased 3.56 per cent to RM49.11 million from RM47.42 million previously.
For the first half, DNeX's net profit fell 72 per cent to RM27 million from RM94.87 million. This was due to the volatility of crude oil price and margin compression in the oil and gas industry even though revenue grew 25 per cent to RM92.93 million against RM74.31 million a year ago.
DNeX group managing director Zainal Abidin Jalil said it remains committed to strengthening its business portfolio and business reach for both its IT & e-Services and Energy divisions and strive to eventually achieve a good balance in terms of earnings contribution from both divisions.
“In view of the overall market softness of the oil and gas industry, we are exploring more contracting opportunities in the downstream sector,” he said in a statement yesterday.
“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.
DNeX said its information technology business would continue to firm up its e-services by broadening its product range in business-to-business segment.
“The award to supply portable container systems (PCS) for petroleum products by Petro Teguh (M) Sdn Bhd, is in line with our plan to pursue opportunistic contracting work in oil and gas downstream sector leveraging on OGPC’s expertise in delivering innovative engineered systems in short-cycle projects,” it added.
It noted that the PCS project augurs well with its strategy to expand on the company’s energy division and further strengthen the business segment and provide growth moving forward.
DNeX proposed a single-tier interim dividend of 0.5 sen per share for the year ending December 31, 2017, payable on October 2.