Ancom Nylex Bhd MD/CEO Lee Cheun Wei.
PETALING JAYA: Ancom Nylex Bhd
is maintaining an optimistic outlook for its financial year ending May 31, 2025 (FY25), despite facing challenges in the first quarter due to higher export costs impacting its agricultural chemicals (agrichem) segment.
While net profit for the quarter ended Aug 31, 2024 (1Q25) plunged about 36.5% year-on-year (y-o-y) due to higher freight costs from geopolitical tensions, the manufacturer of agricultural chemicals said “prospects remain exciting, with growth drivers making good headway.”
Managing director and group chief executive officer Datuk Lee Cheun Wei said geopolitical uncertainty remained elevated, exacerbated by armed conflicts and trade tensions around the world.
“Hence, global supply chains are being reshuffled as producers adapt to mitigate geopolitical risk, often at higher costs,” he said in a statement.
He said that seaborne trade disruptions, particularly in the Middle East, have led to shipping delays and elevated costs.
“Nevertheless, freight costs have somewhat moderated and we hope that it is a sign that it has peaked,” he said.
Lee said the group would keep making progress with its new active ingredient and expand its current products into new crops in existing markets.
“We remain focused and steadfast in executing our growth plans,” he added.
For 1Q25, Ancom Nylex’s revenue rose 5.8% y-o-y to RM515.5mil from RM487.4mil in the previous corresponding quarter.
While the revenue contribution of the agrichem segment grew marginally to RM136.6mil in 1Q25 from RM136.3mil a year ago, its industrial chemicals segment achieved a 10.4% y-o-y growth to RM339.5mil in 1Q25 versus RM307.4mil in 1Q24 supported by higher selling prices and increased volume.
However, the top line increase was not reflected at the bottom line as Ancom Nylex’s agrichem 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.
Net profit dropped by 36.5% y-o-y to RM13.21mil in 1Q25, down from RM20.8mil in the previous corresponding period.
Its agrichem segment, which reported a slight increase in revenue, saw per-tax profit for the quarter fell to RM22.1mil from RM26.9mil in 1Q24, mainly impacted by the higher freight costs.
Meanwhile, its industrial chemicals segment saw pre-tax profit jumping 106.3% y-o-y to RM7.5mil in 1Q25 from RM3.7mil in 1Q24, partly owing to cost savings from the rationalisation of operating expenses.
On the corporate front, Germany-based chemical firm Helm AG recently emerged as a substantial shareholder in Ancom Nylex, with a 9.47% stake, following its subscription to 96.22 million new shares through a private placement.
Lee said this “improves and strengthens” the group’s 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,” Lee added.
