KUALA LUMPUR (March 22): Health supplement firm DXN Holdings Bhd expects its Brazil operations to turn profitable by 2025, with potential to become its main market by revenue in the next five years.
Brazil’s large population and the size of its economy makes it competitive when compared to other markets in South America, chief executive officer Teoh Hang Ching said at an investors briefing on Friday. The company is also present in Bolivia and Peru, which together accounts for over 40% of its annual revenue.
“Brazil in the next five years will be one of our top markets because we have strong network marketing by our members,” Teoh said.
“The company also has “sustainable business model developed over the years, supported by our IT team synchronising and streamlining all business processes,” he added.
DXN, listed in May 2023, opened its door for business in Brazil this month, with the establishment of its office in Sao Paulo, after spending over three years preparing for the business, including on import and product registration.
DXN reiterates 50% dividend payout policy
Meanwhile, Teoh said the group is committed to its dividend policy to distribute at least 50% of its annual net profit. DXN has strong cash generation from operating activities which can support the payment of dividends, he added.
DXN has paid a total dividend of RM129.6 million so far, for the nine months ended Nov 30, 2023 (9MFY2024). This equals a 55.9% payout of its net profit of RM231.98 million year-to-date.
Cash and cash equivalents stood at RM498.61 million at end-November 2023, while borrowings totalled RM183.26 million.
Net profit rose 16.47% to RM78.36 million in the third quarter (3QFY2024) from a year ago, underpinned by higher revenue. Quarterly revenue inched up by 2.52% to RM450.29 million, on the back of sales growth in the Latin America region.
At market close on Bursa Malaysia on Friday, DXN’s shares were down one sen or 1.6% to 61.5 sen, below its initial public offering (IPO) price of 70 sen. At its closing price, the company was valued at RM3.07 billion.
DXN was previously listed on the Main Market of Bursa Malaysia in 2003, before the company was delisted in December 2011, following a buyout by founder Datuk Lim Siow Jin.
Lim is still currently the largest shareholder with a 68% stake, according to its annual report.