KUALA LUMPUR, 31 May 2021 – Techna-X Berhad (“Techna-X” or the “Group”), the world’s only manufacturer of ruthenium based ultra capacitor and a key technology player in the renewable energy storage, digital transformation and IOT space announced its first quarter results ended 31 March 2021 for financial year ending 31 December 2021 (FYE21) to Bursa Malaysia Securities Berhad.
Performance for the reporting quarter is reflective of the Group’s new busines operation under a strategic transformation in place with discontinued operations from its loss-making Coke business.
For the reporting quarter, the Group recorded a gross profit of RM7.3 mil on the back of revenue of RM9.6 mil contributed by its technology businesses. For the first time after 20 months of transformation, the Group chartered a net profit of 1RM4.3 mil for its new business operations.
“Our rationalisation plan for the proposed disposal of the loss-making coke manufacturing business and our transformation into the provision of intelligent digital ecosystem and energy storage solutions are seeing promising results as reflected in this current quarter performance as well as in the coming quarters.”, said Tunku Naquiyuddin ibni Tuanku Ja’afar, Executive Chairman of Techna-X.
Discontinued Operation in Coke Business
The Group’s coke business classified as “discontinuing operation” recorded a revenue of approximately RM41.8 million in the current quarter compared to the preceding year corresponding quarter of approximately RM101.3 million. The coke business remained in a dire situation with approximately RM25.6 million losses incurred during the current quarter under review compared to approximately RM39.1 million losses in the preceding year corresponding quarter.
The financial results attributed to the coke business segment reported in the current quarter served as a testament to the fact that the prospects of the coke industry (in particular that of independent coke manufacturer) in China will continue to be mired with challenges moving forward. Whilst China Government continues to curb production in the domestic market, demand for coke from the overseas market is still expected to languish from the unresolved US-China trade tensions, economic and geopolitical risks as well as the proliferation of the global COVID-19 pandemic.
“In this respect, as soon as the Group is able to dispose of the hemorrhaging and loss making coke business, more resources and efforts can be channelled towards building up the promising technology and digital transformation businesses for growth and value creation, moving forward. These businesses which are predominantly technology focused and/or use technology to transcend and stay ahead of its competition and are expected to contribute significantly towards the revenues and profits of the Group. We are answerable to our shareholders to deliver a sustainable income stream and long-term growth prospects under our technology businesses without the coke manufacturing operation.”, added Tunku Naquiyuddin.
Future Prospects
Techna-X pivoted into the technology frontier in 2019 and has since acquired 6 companies with approximately RM140 million investment. The Group has positioned itself as a key technology player in the Asia Pacific region for a more sustainable income stream and long-term growth prospects. Its most recent activity include a joint venture partnership with World Class Industry Experts in Electric Mobility Technologies, to set-up E-Rex for the development of a low voltage powertrain suitable for low voltage electric vehicle passenger cars and commercial vehicles. This will be key for Techna-X to leverage its energy storage technologies and capabilities to play a pivotal role in the electric mobility industry. E-Rex is targeting to launch a working electric vehicle prototype by the end of the year.
To-date, the Group has a healthy order book of US$300 million over 3 years from two multinationals, Kone and Daikin Industries. Barring unforeseen circumstances, Techna-X is expected to perform better on both top and bottom line in the coming quarters.
Whilst the Group believes it has put in place the right strategy and business model to future proof itself, there is no denying the fact that the economic challenges brought about by the COVID-19 pandemic in 2020 will continue to spill over to a large part of 2021, given the unabated COVID cases and the slow rollout of the vaccination programme. This can be evidenced by the tough start to 2021 from the social
economic standpoint. Towards this end, the Group will remain vigilant and respond appropriately to any developments that would unfold and capitalise on whatever opportunities that may come its way in effort to make the best out of the situation that the Group is in.
1 Excludes corporate exercise expenses of RM2.2 million incurred during the reporting quarter.
