KUALA LUMPUR (July 27): Direct seller of consumer health and wellness products DXN Holdings Bhd’s (KL:DXN) net profit fell nearly 21% to RM58.5 million for the quarter ended May 31, 2026, from RM73.9 million a year earlier, due to weaker sales in several markets.
The decline was mainly caused by customers holding higher inventory levels after stocking up ahead of price increases in major markets. Margins declined as lower sales reduced profitability, while fixed operating costs remained largely unchanged. The group also continued investing in upstream and downstream business initiatives.
The board declared a first interim dividend of 0.6 sen per ordinary share for the financial year ending Feb 28, 2027, amounting to approximately RM29.8 million, payable on Aug 28, 2026.
Revenue also fell 7.5% to RM443 million from RM479.1 million, mainly due to lower exports to the Middle East and weaker market conditions in Africa.
Despite the weaker quarter, executive director and group chief executive officer Prajith Pavithran said in a statement DXN plans to spend up to RM500 million in capital expenditure for financial year 2027 to expand manufacturing capacity, develop plantations, strengthen raw material supply and grow in new markets, particularly in Africa and Europe.
The company remains confident in its long-term growth prospects, supported by its global presence, integrated business model and disciplined capital allocation. Over the next three years, DXN targets steady revenue growth, a gross profit margin of at least 80%, double-digit return on equity (ROE), a dividend payout ratio of at least 50%, and maintaining a net cash position.
DXN also highlighted growth in several markets, including Mongolia and Peru, which recorded positive growth during the quarter.
In its filing with Bursa Malaysia, DXN said it expects FY2027 growth to be supported by rising global demand for health and wellness products, despite challenges such as geopolitical uncertainty and higher energy costs.
The company believes its global operations and integrated supply chain will help reduce the impact of market disruptions.
DXN plans to expand production capacity by investing in new manufacturing facilities in Malaysia, Morocco and Peru, while upgrading its Nepal facility. Upon completion, these projects are expected to increase total production capacity by about 500%, improve efficiency and shorten delivery times.
The company is also developing coffee plantations in Malaysia, Brazil and Bolivia to secure more of its own coffee supply and reduce reliance on external suppliers.
DXN is expanding into new markets, including Egypt, the UK, Ghana and Zambia, to grow its customer base and diversify revenue sources.
DXN’s shares were unchanged at 47.5 sen, valuing the company at RM2.3 billion. Year-to-date the stock is down almost 7%.