KUALA LUMPUR (Aug 22): Main Market-listed Dagang Nexchange Bhd’s (DNeX) net profit plunged 87% to RM11.93 million for the second financial quarter ended June 30, 2017 (2QFY17) compared with RM89.5 million a year earlier on lower level of upstream activities due to soft market sentiment in the oil and gas (O&G) industry.

Quarterly revenue grew 4% to RM49.11 million from RM47.42 million previously on the back of the consolidation of OGPC Sdn Bhd's results, recurring income from operation and maintenance of the vehicle entry permit and road charges (VEP & RC) system and oilfield drilling services to Petronas.

Earnings per share dropped to 0.68 sen against 11.54 sen in 2QFY16.

The technology infrastructure services provider expects to deliver positive results for the year 2017 barring any unforeseen circumstances, according to its bourse filing today.

For the first half of FY17 (1HFY17), DNeX net profit fell 72% to RM27 million from RM94.87 million. Net profit was affected by the volatility of crude oil price and margin compression in the O&G industry even though revenue clocked in 25% higher at RM92.93 million against RM74.31 million a year ago.

The group attributed the increase in 1HFY17 revenue mainly to the consolidation of OGPC’s result, new recurring income from operation & maintenance the VEP & RC system, continued growth in the group business-to-business (B2B) and business-to-government (B2G) business and oilfield drilling services.

Commenting on its prospects, DNeX said the group information technology business is continuing to firm up its e-services by broadening its product range in the B2B segment to complement the group’s position in delivering B2G services.

DNex share price surged to a five-year record high of 64 sen on May 5. The stock retreated to 53 sen today, with 44 million shares crossing hands. At today’s closing, its market capitalisation stood at RM920 million. Year to date, the stock has gained about 106%.