Main Market-bound DXN's 4Q net profit falls 20% on impairment, forex loss

KUALA LUMPUR (May 17): Main Market-bound DXN Holdings Bhd recorded a 20.2% drop in its net profit to RM55.17 million for the fourth quarter ended Feb 28, 2023 (4QFY2023), compared to RM69.16 million a year earlier, owing to an impairment of property, plant and equipment (PPE) for facilities in Indonesia, a provision in a custom duty case, and a foreign exchange loss.

In a Bursa Malaysia filing on Tuesday (May 16), DXN said revenue for the quarter rose 19.3% to RM404.5 million from RM339.35 million a year ago.

Earnings per share dropped as well, to 23 sen from 29 sen previously.

“[The increase is] primarily due to strong sales momentum across the board, with higher sales growth of fortified food and beverages in Latin America, Morocco and India,” said DXN.

Overall, DXN ended this financial year (FY2023) with a boost in both revenue and net profit, with revenue hitting RM1.6 billion compared to RM1.24 billion in FY2022, and net profit rising to RM275.4 million from RM242.92 million.

However, it should be noted that the group’s earnings before interest, tax, depreciation and amortisation (Ebitda) margin decreased as well, primarily due to an impairment of PPE, custom duties, as well as the legal and professional fees undertaken for the upcoming initial public offering (IPO) listing.

“We are thrilled to report our robust financial results for the FYE (financial year ended) Feb 28, 2023. Our financials are mainly attributed to the strong demand for our fortified food and beverages, in particular our coffee products, by our members across the globe,” said its executive chairman and founder Datuk Lim Siow Jin.

“The group is experiencing high growth supported by various drivers [which] include expanding into our existing 48 markets and establishing five new markets within two years. Additionally, we are launching a new series of tea variants fortified with natural active ingredients, and we have carbonated beverages in the pipeline,” said the group.

The group is also continuing to expand its production facilities in China, India, the Middle East, and Peru, while further enhancing its information technology, said DXN.

“Looking ahead, we are confident that we will be able to maintain our momentum as we expand our product offerings and broaden our presence in existing and new markets,” said Lim.

DXN is involved in sales of health-oriented and wellness consumer products. Previously listed on the Main Market in 2003, it was delisted in December 2011 after being privatised by Lim.

DXN is slated to be listed on Bursa Malaysia's Main Market on May 19, 2023 with an IPO listing 60 million new shares at an issue price of 70 sen per share, to raise RM121.6 million.

On May 11, DXN announced that its IPO has been oversubscribed by 3.2 times and the notices of allotment are said to be allocated on May 19.