KUALA LUMPUR (Aug 21): Hextar Global Bhd’s net profit for the second quarter ended June 30, 2023 (2QFY2023) contracted by 43.33% to RM8.67 million against RM15.3 million a year ago, dragged by lower revenue, higher operating expenses (opex) and finance costs.

Revenue for the quarter dropped 14.93% to RM133.48 million, from RM156.91 million a year earlier, amid lower revenue contribution from the agriculture segment due to subdued selling prices on key herbicide products, coupled with lower revenue from the consumer products segment, which had been divested by the group in the current quarter.

As a result, earnings per share fell to 0.23 sen in 2QFY2023 from 0.39 sen in the same quarter a year ago, the agrochemical group’s filing showed.

Net profit in the six-month period declined 44.1% to RM17.3 million versus RM30.95 million in 6MFY2022, on the back of the unsatisfactory margin of the agrochemical products, higher opex and finance costs. Besides, the consumer products segment, which had discontinued its operations by the end of May, had also recorded a RM2 million net loss for the period.

Revenue was down by 10.72% to RM272.22 million in 6MFY2023 from RM304.9 million in the same period last year, mainly due to lower revenue contributed from the agriculture segment.

Despite the softening revenue in the agriculture segment, Hextar group managing director Lee Chooi Keng said that the group saw a continuous strength and solid sequential improvement in its specialty chemicals segment.

"We continue to generate strong operating cash flow, which amounted to RM54 million for the six months [of 2023], and we remain on track to achieve the company's goal backed by aggressive growth initiatives which we are implementing," said Lee.

The group is also optimistic of delivering stable earnings despite the challenges faced by its agriculture segment, while remaining confident in the resilience of its business portfolio as well as the sustainability of its strong cash flow position going forward.

"The recent completion of the sale of our consumer products’ companies marks our complete exit from that business segment, thus allowing the group to focus our efforts on our core businesses to boost Hextar’s profitability," she added.

On Monday (Aug 21), Hextar’s shares closed down half a sen or 0.66% to 75.5 sen, valuing the group at RM2.97 billion.