DXN Holdings Bhd will be deploying up to RM500mil in planned capital expenditure for financial year 2027 to strengthen its vertically integrated global platform.
This includes expanding manufacturing capacity across Malaysia, Brazil, Morocco, Peru and Bolivia.
It also involves developing plantation initiatives in Bolivia, Brazil and Malaysia to enhance raw-material security and cost resilience, alongside accelerating market development across new and underpenetrated markets, particularly in Africa and Europe.
On another note, DXN Holdings’ quarter one financial year 2027 (1QFY27) Feb results missed expectations due to weaker sales, reflecting unfavourable FX translation and distributors frontloading purchases ahead of a price increase.
However, RHB stays positive as they expect the sales weakness to be temporary, with longer-term growth intact, supported by initiatives into new markets, and upstream/manufacturing expansion.
1QFY27 core net profit declined 20.8% year-on-year (YoY) to MYR58.5 mil, meeting 18% and 17% of RHB and consensus full-year estimates. The miss was mainly due to weaker operating leverage, as high fixed-cost base weighed on earnings.
Revenue fell 7.5% YoY and 6.7% quarter-on-quarter (QoQ) to MYR443.0 mil. QoQ weakness mainly reflected slower replenishment after distributors brought forward purchases ahead of the price increases, while YoY performance was affected by unfavourable FX movement.
Earnings before interest, tax, depreciation and amortisation margin continued to compress YoY as DXN carried a larger fixed-cost base and continued to incur expenses related to its upstream and downstream initiatives.
RHB expects sales to improve from 2QFY27 as distributors progressively resume normal replenishment.
Management indicated that orders had already begun to pick up in June, while the 10% average price increase should provide an additional topline uplift as volume normalises.
“However, we expect the earnings recovery to be more gradual as DXN’s expansion remains at an early stage,” said RHB.
Costs related to the Gua Musang upstream coffee operations, new manufacturing facilities, and the development of newer export markets are likely to remain elevated before these investments reach sufficient scale.
Several new operations may also incur initial losses, with management previously guiding that new factories could take 2-3 years to achieve profitability.—July 28, 2026
Main image: DXN Holdings
