Ancom Berhad’s second six months financial results revenue was the highest ever for the group coming in at RM937.6 million, a one-third increase from 1HFY21’s revenue of RM703.4 million, resulting in profit after tax of RM21.1 million, more than doubled last year’s net profit of RM9.2 million.
The agricultural chemicals segment recorded revenue of RM249.2 million and earnings before interest and tax (“EBIT”) of RM32.7 million in 1HFY22, improving by 48.9% and 18.8% year-on-year respectively. The strong performance was driven by favourable regulatory changes, as well as maiden contributions from new products, which resulted in higher sales locally and abroad.
At the same time, the industrial chemicals division, too, reported strong revenue growth of 34.9% YoY, increasing from RM454.6 million in 1HFY21 to RM613.5 million in 1HFY22. Segmental EBIT soared 115.1% to RM17.4 million over the same period. Macro factors such as higher average crude oil prices and increased industrial activities were key catalysts behind the growth.
Group CEO of Ancom Berhad, Mr Lee Cheun Wei said, “With two more quarters to go and assuming no major hiccups, we are looking at a breakthrough year for FY22. Sales of our agrichem products have markedly increased due to favourable regulatory changes in the global herbicide market. The ban of a popular weedkiller called paraquat in countries like Thailand in recent years has created opportunities for close substitutes which the group produces.
For 2022, Ancom is looking to become an integrated chemicals player through its ongoing consolidation exercise involving Nylex (Malaysia) Berhad. It also expects to complete the proposed acquisition of a livestock chemicals business. Both exercises are slated for completion by February 2022. Additionally, its new manufacturing plant in Klang is set to finish construction by June 2022.
On challenges, Mr Lee acknowledges the prevailing global supply chain shock and elevated freight costs. However, he believes Ancom is capable of overcoming these obstacles.
Meanwhile, for the quarter under view, 2QFY22 revenue increased 31.7% quarter-on-quarter (“QoQ”) to RM532.9 million. Net profit for the period came in 33.6% higher QoQ at RM12.1 million.