DXN Latest QR Results

DXN Holdings Bhd. is a Malaysia - incorporated company with subsidiaries. The following is a summary of its unaudited interim financial report for the second quarter ended 31 August 2024 and an analysis of its investment potential:

1. Financial Highlights:
- Revenue Growth: In Q2 2024, revenue was RM488.433 million, a 6.6% increase from Q2 2023 (RM458.309 million). For the first half of 2024, revenue reached RM963.486 million, a 9.2% growth compared to the same period in 2023. Growth was driven by increased sales in Peru and Bolivia.
- Profitability: Profit before tax was RM111.474 million in Q2 2024, down 5.6% from Q2 2023. Net profit for the period was RM69.930 million in Q2 2024, a 12.4% decrease from Q2 2023. The decline was due to factors like foreign exchange losses and increased costs.
- Margins: EBITDA margin contracted from 29.1% in Q2 2023 to 25.7% in Q2 2024. PBT margin decreased from 25.8% to 22.8% over the same period. PATAMI margin dropped from 16.6% to 13.5%.
- Dividends: The company declared dividends in 2024, including a fourth interim dividend of 1.00 sen per share in April and a first interim dividend of 0.90 sen per share in July.
2. Balance Sheet and Cash Flows:
- Assets and Liabilities: Total assets were RM2,081,026 million as of 31 August 2024. Non - current assets included property, plant, and equipment, and current assets consisted of inventories and cash. Total liabilities were RM703,637 million.
- Cash Flows: Net cash from operating activities was RM271,116 million in the first half of 2024. Cash used in investing activities was RM1,405 million, and cash used in financing activities was RM170,514 million.
3. Segments and Operations:
- Business Segments: The company operates in health and wellness consumer products, investment holding, and other non - reportable segments. The health and wellness segment had the highest revenue and segment profit.
- Geographical Presence: Growth was driven by Latin American markets, with increased sales in Peru and Bolivia.
4. Risks and Outlook:
- Risks: Foreign exchange fluctuations, especially the strengthening of the Malaysian Ringgit, affected margins. Higher employee and shipping costs also impacted profitability.
- Outlook: The company aims to expand into new markets, launch new products, and optimize production. It is well - positioned for growth in FY 2025.

⚠️ Investment Comments:
- Positive Aspects: The company has shown consistent revenue growth, indicating market expansion and product acceptance. Dividend payments suggest a commitment to returning value to shareholders.
- Cautionary Points: Declining profitability margins and the impact of foreign exchange losses need to be monitored. Competition in the health and wellness market could pose challenges.

Investors should consider these factors, conduct further research, and assess their risk tolerance before making an investment decision.