KUALA LUMPUR (May 21): Dagang NeXchange Bhd (KL:DNEX) swung back to profitability in the first quarter, driven mainly by a turnaround in its semiconductor division and improved earnings from its information technology (IT) segment.

The group posted a net profit of RM12.78 million for the quarter ended March 31, 2026 (1QFY2026), compared with a net loss of RM79.04 million a year earlier. Revenue, however, slipped 9.9% to RM267.56 million from RM296.83 million, as all three operating divisions — semiconductor, energy and IT — recorded lower sales.

The semiconductor division saw revenue decline 3% due to lower shipment volumes, although this was partly cushioned by a higher average selling price, which rose to US$805 per wafer from US$589 a year earlier. The division posted a profit before tax of RM900,000, versus a loss before tax of RM10.2 million in 1QFY2025, helped by lower operating costs.

Emerging technologies accounted for 55% of the semiconductor segment’s quarterly revenue, up from 38% a year earlier.

The energy segment recorded a 4% decline in revenue, mainly due to currency translation effects. Its profit before tax fell to RM11.1 million from RM25.4 million a year earlier after the group booked a foreign exchange loss of RM6.8 million, compared with a forex gain of RM7.8 million previously. Excluding forex effects, the segment’s pre-tax profit improved slightly to RM17.9 million from RM17.6 million.

Meanwhile, the IT segment’s revenue fell 6% following the completion of a major project that had contributed significantly in the corresponding quarter last year. Despite the lower revenue, the segment's profit before tax rose 12% to RM16.7 million from RM14.9 million, attributed to lower forex losses.

On prospects, DNeX said its semiconductor business is expected to remain resilient, underpinned by demand from artificial intelligence (AI), high-performance computing, automotive electronics, industrial automation and data centre applications. The group said it will continue investing in advanced manufacturing capabilities, automation, yield improvements and talent development to strengthen its position in the global semiconductor value chain.

For its energy business, the group expects support from steady global energy demand, ongoing upstream and downstream activities, and higher industry spending amid elevated crude oil prices. DNeX said it remains focused on maximising value from its producing UK North Sea asset, the Anasuria Cluster, while progressing towards first oil from the reactivation of the Abu Cluster in Malaysia.

The IT segment is expected to benefit from ongoing digital transformation initiatives and rising adoption of AI-driven solutions. DNeX said it is preparing to launch its proprietary speech-to-text expert model as part of efforts to commercialise its in-house AI capabilities, adding that early customer engagement has been encouraging.

DNeX shares closed up 0.5 sen or 1.4% to 35 sen on Thursday, valuing the group at RM1.22 billion. Year to date, the stock has gained 12.9%.