Ancom Nylex's 3Q profit slips on ongoing headwinds

KUALA LUMPUR: Ancom Nylex Bhd recorded lower revenue and profit in the third quarter ended Feb 28, 2025, as it continued to face macroeconomic headwinds.

The chemicals firm said net profit fell to RM18.05mil in 3QFY25 from RM20.11mil in the year-ago quarter, while revenue dropped to RM449.01mil from RM516.78mil previously.

"This was mainly attributable to a softer contribution from the industrial chemicals segment, due to lower selling prices and volume," said the group.

Earnings per share slipped to 1.77 sen from 2.12 sen in the comparative quarter.

According to the group, the weaker performance was primarily owing to adverse US dollar fluctuations, which impacted both selling prices and import costs.

Over the three cumulative quarters, the group's net profit came to RM46.42mil as compared to RM63.03mil in 9MFY24, and revenue was lower at RM1.42bil against RM1.51bil in the comparative quarter.

Ancom Nylex managing director and group CEO Datuk Lee Cheun Wei said market uncertainties are expected to remain elevated, with rising trade barriers potentially leading to further global trade restrictions.

"Domestically, the recent minimum wage hike may exert upward cost pressure, with an estimated impact of approximately RM1mil per annum. While we remain vigilant of these external pressures, there are always pockets of opportunities that we are working hard to capture," he said in a statement.

He added that the group is expanding its agrichem market by targeting larger hectarage crops with label registration continuing to chart good progress.

The group has also completed the machine installation for the in-house production of the intermediate for its new active ingredients.

"With this, we anticipate the commercial production for our new AI to start very soon," said Lee.

As at end-February 2025, the group's net gearing improved to 0.2 times from 0.38 at the end of the previous financial year.

Total borrowings were reduced to RM287.9mil from RM347.6mil as at May 31, 2024, with more than 85% of the total borrowings for short-term working capital needs.

For the financial year under review, the group has proposed a second interim dividend by way of distribution of treasury shares on the basis of one treasury share of Ancom Nylex for every one hundred shares held by shareholders.