Tech and Energy Segments Continue to Propel DNeX’s Earnings

For the third quarter ended 31 March 2022 (3Q FY2022), DNeX posted a revenue of RM382.6 million, of which the new Technology segment that included SilTerra, stood as the largest contributor at RM232.1 million, accounting for 60.7 per cent of total revenue. This was followed by the Energy segment with RM102.9 million in revenue or 26.9 per cent while the remaining RM47.6 million or 12.4 per cent was from the Information Technology (IT) segment.

The new Technology and Energy segments continued to be the main earnings contributor to the Group, underpinned by DNeX’s strategic investments in SilTerra and Ping Petroleum (Ping).  

It is notable that there are no year-on-year comparative figures due to the change in the financial year-end from 31 December to 30 June.

However, on a quarter-on-quarter (QoQ) basis, the Group’s 3Q FY2022 revenue rose 8.3 per cent to RM382.6 million from RM353.3 million, while PAT increased 19.9 per cent to RM77.8 million from RM64.9 million recorded in the preceding quarter ended 31 December 2021 (2Q FY2022).

The increase in revenue and PAT were mainly driven by improved financial performances in the Technology and Energy segments. This was largely due to increase in sale of semiconductor wafers, and higher average selling prices of wafer and crude oil.

DNeX recorded a revenue and PAT of RM1.01 billion and RM444.2 million respectively, for the nine-month period ended 31 March 2022 (9M FY2022). Included in the Group’s PAT was a one-off gain effect from business combination on the acquisition of SilTerra amounting to RM264.5 million in 1Q FY2022.

“We are confident SilTerra will continue to benefit from the extended global semiconductor industry upcycle, supported by multiple long-term wafer supply agreements (LTAs) and shift in product mix to include new technologies that are geared towards data centres, 5G networks and life sciences applications. In addition, the planned expansion to ramp up SilTerra’s annual production capacity by 10 per cent by early 2023 will translate to better economies of scale, with further improvement in manufacturing cost,” said Group Managing Director of DNeX, Tan Sri Syed Zainal Abidin Syed Mohamed Tahir.

“As part of its long-term plans to enhance business sustainability, the Group is exploring new opportunities to expand its semiconductor fabrication capabilities and address the strong global demand for semiconductors. The Group’s memorandum of understanding with Big Innovation Holdings Limited (BIH), a wholly-owned subsidiary of Hon Hai Precision Industry ( or popularly known as Foxconn) to build and operate a new 12-inch wafer fabrication plant operating to produce 40,000 wafers per month, encompassing the manufacturing of 28-nanomometer and 40-nanometer technologies will also complement the Group’s existing investment in SilTerra, in areas such as best practices and technology excellence,” he added.

To benefit from the current strong oil prices, capacity enhancement work programmes are underway to unlock remaining economic reserves at Anasuria cluster through improved operations and infill drilling.

Production from Ping’s second oilfield asset, Avalon Oil Development, which has total estimated recovery of 23 million barrels of oil is scheduled to begin between mid 2024 and mid 2025.

In 9M FY2022, DNeX generated a strong net cashflow from operating activities amounting to RM551.1 million. The Group’s balance sheet remains healthy as it is in a net cash position with total cash of RM1.05 billion, exceeding total loans and borrowings of RM305.2 million as at 31 March 2022.

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