Techna-X Continues Profit Streak in 2Q22

Net profit of RM302m in 2Q22 turns around shareholders’ fund with net asset standing at 4.5 sen/share

Techna-X Continues Profit Streak in 2Q22
 Datuk Jared Lim, Executive Director of Techna-X

Kuala Lumpur, Malaysia, 29 August 2022 – Techna-X Bhd (Bloomberg: 2739 MK), a leading tech innovator and digital transformation enabler, today reported a record net profit of RM301.9 million for the second quarter ended 30 June 2022 (2Q22), compared to a net loss of RM33.5 million for the same quarter last year, arising principally from the successful divestment of the Group’s original metallurgical coke business.

The turnaround net profit effectively reversed the Group’s shareholders’ fund to be in the black of RM93.0 million as at 30 June 2022, compared to a negative equity of RM27.0 million as at 31 December 2021. With the positive shareholders’ fund, Techna-X’s group net assets currently stand at 4.5 sen per share.

Of the RM301.9 million net profit, Techna-X recognized a disposal gain of RM103.9 million from the divestment and a reversal of RM192.3 million of accumulated foreign exchange translation reserves pertaining to the disposed asset. The Group ceased its loss-making coke business since December 2021, and redirected resources to technology- focused transformation initiatives.

Jangan Terburu-Buru Laksanakan Generasi Penamat Tembakau
Menurut wakil Pusat Pilihan Pengguna Malaysia, Tarmizi Anuwar, perlaksanaan Generasi Penamat Tembakau adalah satu tindakan yang terburu-buru dan seharusnya mengambil kira pelbagai sudut bagi memastikan ia adalah satu usaha yang akan berjaya dengan cemerlang.

Rising Revenue

At the same time, the Group continued to reap benefits from the Group’s realigned business model as a technology enabler, by reporting strong top- and bottom- line growth year-on-year in its core continuing operations 2Q22, with revenue rising 65.2% to RM20.8 million and profit after tax (PAT) coming in at RM6.1 million from RM0.3mil previously.

The improved performance for the core continuing operations from both the Group’s Technology and Digital Transformation Solutions segment and Technology Driven Food & Beverage (F&B) segment was attributed to the improving business sentiments as economies in the region adjusted to an endemic post-COVID phase.

Y.A.M. Tunku Naquiyuddin ibni Tuanku Ja’afar, Executive Chairman of Techna-X Berhad says, “The quarter’s results continued the leapfrogging performance achieved in the preceding quarter of 1Q22, which posted a core PAT of a similar quantum. Techna-X’s turnaround is certainly sturdy, and indicates the first fruits of our realigned business model. In recent years, we have been focusing on rejuvenating the Group’s businesses by leveraging on our core competency in technology deployment.

“The divestment of our loss-making coke operations is an important step forward for us, because we can now redirect our financial and human resources towards innovations and tech-enabling for our clients and partners who desire to embrace digital transformation in their enterprises.

“We are confident that the five strategic pillars in our digital transformation business will form the very foundation for Techna-X to build a high growth proposition in years to come.”

Technology Solutions

Techna-X’s Technology and Digital Transformation Solutions segment comprises five key technology initiatives, namely Smart City, Agritech, Electrical Mobility, Energy Storage, and Communications and Security Solutions. The business segment is currently the main profit growth driver.

The business segment recorded more than 300% rise in profit before tax of RM6.3 million in 2Q22 on revenue of RM8.3 million, compared to revenue and PBT of RM4.6 million and RM1.5 million respectively in the corresponding quarter last year.

Meanwhile, the Technology Driven F&B segment - which owns the TGI Fridays franchise in Malaysia and China, as well as homegrown Teh Tarik Place chain - continued to show post Covid normalization uptick in patronage during the quarter under review, in addition to traffic channelled in by the Group’s in-house developed M Squared mobile app.

The segment posted 57% higher revenue of RM12.5 million for 2Q22 and PBT of RM0.6 million; in comparison to RM0.3 loss before tax on revenue of RM7.9 million a year ago.

For the first half ended 30 June 2022 (1H22), group revenue rose 89.3% to RM42.0 million from RM22.2 million previously, while core PAT improved more than five folds to RM12.5 million from RM2.3 million last year.

However, if accounting for the gain from disposal of the coke business, the Group would have posted a net profit of RM316.5 million for 1H22, compared to a net loss of RM57.4 million over the same period last year.

On prospects, Datuk Jared Lim, Executive Director of Techna-X says, “Our team is currently working on numerous exciting projects, which have high growth potential in terms of scale of implementation, as well as promising adoption of our technologies and solutions by the market that we are targeting. A case in point is our Energy Storage solution, which is on the cusp of mass adoption by commercial and industrial entities.”