KUALA LUMPUR (Oct 17): Ancom Nylex Bhd (formerly Ancom Bhd) reported a net profit of RM20.03 million for its first quarter ended Aug 31, 2022 (1QFY23) — up 122% from RM9.04 million in the previous year's corresponding quarter — amid stronger chemical sales by both its agricultural and industrial divisions, and higher selling prices.

In a statement, the group said the quarter also marked its strongest quarterly core earnings of RM20.03 million — up 18.3% from RM16.9 million in 4QFY22, when it made a net profit of RM31.9 million. This follows the takeover of its formerly 50%-owned Nylex (M) Bhd for RM179.3 million, an acquisition that was completed in January this year. Ancom then changed its name to Ancom Nylex in April.

The group's revenue for 1QFY23 climbed 35.8% year-on-year (y-o-y) to RM549.8 million from RM404.73 million in 1QFY22. Earnings per share rose to 2.31 sen from 1.23 sen previously.

The group said its agricultural chemicals division reported higher segmental profit of RM23.2 million in 1QFY23, from RM16.2 million in 1QFY22, due to higher revenue — which rose to RM162.3 million from RM115.5 million — and strong demand for its products, especially in the Asean region.

Its industrial chemicals segment, meanwhile, saw profit almost double to RM6 million from RM3.6 million a year ago, as revenue jumped to RM343.7 million from RM259.1 million, mainly on higher selling prices.

Its logistics division's segment registered a segmental profit of RM3.1 million — versus a loss of RM1.1 million previously — as revenue rose to RM15.3 million from RM8 million, driven by higher chartered volume and additional contribution from One Chem Terminal Sdn Bhd.

Its polymer division also saw a higher segmental profit of RM1.6 million, compared with RM300,000 previously, as revenue increased to RM19.6 million from RM13 million on higher contributions from the manufacturing plants in Shah Alam and Indonesia.

Commenting on its prospects, the company said high inflation and increase in financing costs will put pressure on managing its costs, while the supply chain disruptions continue to affect its business.

It said the management will continue to be vigilant in managing these risks and continue to explore and expand opportunities for our business.

"Going forward, we are not resting on our laurels just yet regarding our expansion and consolidation plan. Just two weeks back, we increased our stake in the chemical tank farm operation which is a crucial support to the industrial chemical distribution business. Another near-term development we can expect is the capacity expansion of our existing agrichem plant in Shah Alam by the end of 2022. This will help boost the output of our MSMA-based herbicides to meet surging demand following the ban of a close substitute, paraquat, in Thailand," said Ancom Nylex managing director and group chief executive officer Lee Cheun Wei in the statement.

Ancom Nylex shares closed unchanged at RM1 on Monday (Oct 17), with a market capitalisation of RM926.59 million.