Profit companies

Hextar posts record Q1 net profit of RM15.7m and acquires 100% stake in Australian units

KUALA LUMPUR (May 23): Hextar Global Bhd posted its highest-ever net profit for the first quarter ended March 31, 2022 (1QFY22) at RM15.65 million from RM10.75 million a year ago , driven by higher revenues, margins and growth in its specialty chemicals business.

As a result, earnings per share fell from 0.82 sen to 1.2 sen.

In a filing in Bursa Malaysia on Monday May 23, the group also posted its highest ever quarterly revenue of RM153.63 million as of 1QFY22, down from RM114.82 million previously, largely due a higher contribution to revenues from its specialty chemicals business.

On a quarterly basis, the group’s net profit increased by 9.7% from RM14.26 million in the previous quarter (4QFY21), while revenue increased by 11.29% from 138, 05 million RM for 4QFY21.

Commenting on the group’s financial performance, Hextar chief executive Datuk Eddie Ong Choo Meng said the result reflects the company’s ability to build on the momentum of the previous fiscal year.

“Despite the challenges we faced in our operating environment, from raw material price volatility to supply chain disruptions, we were still able to grow our revenue by 33.8% and our net profit of 54.6% compared to the corresponding quarter of the previous year.

“We were also able to improve our margins from 9.3% in 1QFY21 to 10.7% thanks to higher margins for the specialty chemicals business,” he said.

Going forward, he expects the group to maintain its growth trajectory driven primarily by the specialty chemicals segment.

“The strong start to the year gives us confidence that we are on track to deliver strong results for the year ending December 31, 2022 (FY22),” he said.

In addition, the group also announced its intention to acquire all of the share capital of the two foreign subsidiaries wholly owned by Hextar Kimia, namely Hextar Kimia (Australia) Pty Ltd and International Chemicals Engineering Pty Ltd, in order to consolidate its entry into the Australian Markets and New Zealand Oil and Gas Markets for RM14.3 million in cash.

The group intends to rely on these two companies to promote its agrochemical products in the respective markets.

The acquisition will be funded by internally generated funds and is expected to be accretive to Hextar Group from 3QFY22, he said.

“These acquisitions demonstrate our commitment to growing our business regionally.

“While Malaysia continues to be our key market, the acquisition of PTASR along with Hextar Kimia (Australia) Pty Ltd and International Chemicals Engineering Pty Ltd will provide us with immediate access to the Indonesian, Australian and New Zealand markets while allowing us to add to our capacity and our geographical presence with regard to our core businesses.

“These acquisitions will allow Hextar to accelerate the expansion of our portfolio mix with respect to our chemicals businesses to drive our growth and margins,” Ong said.

As of the lunch break on Monday, Hextar shares were five sen or 2.99% higher at RM1.72, giving it a market capitalization of RM2.26 billion.