Dagang NeXchange Berhad Annual Report 2019

” “ CHAIRMAN’S STATEMENT DAGANG NeXCHANGE BERHAD 8 Thank you for your continued support for DNeX. The Group is on the right track for further growth as it develops an agility to adapt to ever changing conditions. It has made encouraging progress in the year under review in its core divisions namely IT and eServices as well as Energy despite challenges in domestic and global markets. Trade Facilitation and eCommerce segment, key source of the Group’s income, has shown resilience in the face of slower economic growth. Its ventures into new businesses have also helped widen the revenue, making sense of the Group’s strategies in the past. 2019 was an eventful year for DNeX as its unit - Dagang Net Technologies Sdn. Bhd. - received contract extension from the Government of Malaysia (“Government”) for the National Single Window for Trade Facilitation, highlighting the Government’s continued confidence in the Group. The Group also achieved another milestonewhen its subsidiary company Innovation Associates Consulting Sdn. Bhd. was awarded a contract to re-engineer the tax self-assessment systemby the Inland Revenue Board of Malaysia (“IRB”) in a contract worth RM42.75 million. DNeX’s vibrant IT and eServices division was complemented with considerable progress in its Energy division. One of the key highlights was that its wholly-owned subsidiary OGPC Group, won a contract worth RM11.8million fromPETRONAS Dagangan Bhd for the supply, installation, testing, commissioning andmaintenance of automatic tank gauging for some 200 PETRONAS stations worldwide. We are looking forward to concluding the divestment of Ping Petroleum Limited, whose value has increased over the years. Book value of the Group’s investment stood at RM216 million as at 31 December 2019. In 2016, DNeX completed acquisition of 30% interest of Ping at a cost of US$10 million. As DNeX prepares for another exciting year in 2020, it aims to sustain the business momentum and achieve a new revenue height. The Group will focus on growing and strengthening its core businesses while being committed to cost optimisation strategies in its efforts to improve profitability and earning resiliency. Despite challenges especially brought about by global market forces, there are several pockets of growth for DNeX especially in the IT sector. With the Government’s push towards Industry 4.0, we believe the IT sector is poised for the next stage of growth and this should bodewell for DNeX. Dear Shareholders On behalf of the Board of Directors, it is my pleasure to present the Annual Report and Audited Financial Statements of Dagang NeXchange Bhd (“DNeX” or “Company”) and its Group of Companies for financial year ended 31 December 2019. Despite challenges especially brought about by global market forces, there are several pockets of growth for DNeX in the IT sector.