Ancom Nylex Berhad announced its first quarter financial results for the period ended 31 August 2024 with revenue rising 5.8% year-on-year ("YoY") to RM515.5 million from RM487.4 million in 1QFY24. The improvement it said was largely driven by the Industrial Chemicals segment.

However, the top-line increase was not reflected at the bottom-line as the agricultural chemicals segment was impacted by higher freight costs for exports sales stemming from rising geopolitical instability and the sanctions on Chinese imports by the United States. 1QFY25 net profit attributable to the owners of the parent came in at RM13.2 million versus RM20.8 million in the prior year down 35%.

Revenue from the Agrichem segment grew marginally to RM136.6 million in 1QFY25 from RM136.3 million a year ago. Profit before tax ("PBT") for the current quarter under review stood at RM22.1 million compared to RM26.9 million in 1QFY24 due to the aforementioned factor. On a brighter note, the Industrial Chemicals segment achieved a 10.4% YoY growth to RM339.5 million in 1QFY25 vis-à-vis RM307.4 million in the previous year. PBT jumped 106.3% YoY to RM7.5 million from RM3.7 million in 1QFY24. The improvements were chiefly attributed to higher selling prices and volumes for most of its products along with savings from rationalisation of its operating expenses.

Managing Director and Group CEO of Ancom Nylex, Datuk Lee Cheun Wei (拿督李俊伟) said, "We are cognizant that our 1QFY25 performance was rather soft as the Agrichem segment was affected by higher freight costs arising from geopolitical conflicts. Geopolitical uncertainty remains elevated, exacerbated by armed conflicts and trade tensions in numerous parts of the world. Hence, global supply chains are being reshuffled as producers adapt to mitigate geopolitical risk, often at higher costs. Separately, the Middle Eastern conflict has caused seaborne trade to be rerouted, causing shipping delays and snarled travel. Nevertheless, freight costs have somewhat moderated and we hope that it is a sign that it has peaked."

"The Group is mindful of the moderating factors but continues to uphold a positive view of our prospects. We continue to make good headway for our new active ingredient ("AI") as well as our current products penetrating into new crops for the existing markets. We remain focused and steadfast in executing our growth plans."

"On the corporate front, HELM AG recently became our long-term strategic substantial shareholder in Ancom Nylex, which improves and strengthens our shareholding mix. We also see strong synergies as they are one of the world's major independent chemicals marketing and distribution company with a very formidable crop solutions business. All in all, Ancom Nylex continues to uphold our growth trajectory while overcoming inevitable business challenges," Datuk Lee concluded.

For the financial year under review, the Group has proposed a first interim dividend by way of distribution of treasury shares on the basis of 4 treasury shares for every 100 shares.