DAGANG NeXchange Berhad (DNeX) announced its results for the first quarter ended March 31, 2020, today with the company’s profit more than halved amid a challenging business environment.
In 1Q20, DNeX recorded RM63.6 mil in revenue compared to RM68.9 million 1Q19, mainly due to the completion of a one-off submarine cable installation and repair contract in Indonesia in 1Q19.
In the current reporting quarter, the IT and eServices division contributed 78% of the Group’s revenue while 22 % was contributed by its Energy division.
The Energy division showed a 23% increase in revenue in 1Q20 over 1Q19 contributed by Trading & Services which saw an improvement in the order book.
DNeX ‘s profit after tax stood at RM5.9 mil in 1Q20 against RM13.9 mil in the same quarter last year, affected by a lower share of the results of an associate, lower recognition of other income, and completion of submarine cable installation and repair contract in Indonesia in 1Q19. This was partly mitigated by cost savings of RM1.5 mil.
“The company has managed to maintain its profitability amidst a challenging business environment resulting from the Covid-19 pandemic and subsequent restricted mobility. The satisfactory results demonstrate our ability to withstand these challenges,” said Datuk Samsul Husin, executive deputy chairman of DNeX, in a statement today.
“We believe the impact by the pandemic to the group is manageable as most of our projects, especially the government projects, are ongoing and these will carry us through 2020. Selected government projects continued to operate as usual during the Movement Control Order as part of essential services albeit with extra precautions for workers and travel,” he added.
He also said that switching to full digitalisation or at least increasing the level of digitalisation is now an absolute necessity for businesses and organisations. Hence, the company believed global spending in IT and digital technology will not slow down but potentially increase given the current operating landscape, which augurs well for technology solution providers such as DNeX.
“Our Dagang Net Digital Platform (DNDP), a unified platform to enable collaboration on content, aggregation, repository, e-commerce and e-fulfilment, can be the answer to digitalisation either in trade processes or digitalisation of services in both the public and private sectors,” said Shamsul.
DNeX’s shares closed unchanged at 19 sen today. – June 4, 2020
