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DXN’s Q1 2026 Report: Navigating Forex Headwinds with Steady Revenue and an Eye on Global Expansion
DXN Holdings Bhd., a major player in the global health and wellness direct-selling market, has just released its latest quarterly results. The report for the first quarter ended May 31, 2025 (Q1 FY2026), paints a picture of resilience with stable revenue, but also reveals profitability pressures from unfavorable foreign exchange rates. Despite the challenges, the company has declared a dividend, signaling continued confidence in its financial health and commitment to its shareholders. Let’s dive into the numbers and see what they mean for the company’s path forward.
A Closer Look at the Q1 FY2026 Financials
DXN reported a marginal revenue increase of 0.8%, but saw its net profit decline by 13.6% compared to the same quarter last year, a clear sign of the impact of forex headwinds on its bottom line.
Revenue
Q1 FY2026 (ended 31 May 2025)
RM479.1 million
Q1 FY2025 (ended 31 May 2024)
RM475.1 million
This slight uptick in revenue was driven by continued sales growth in its international markets when measured in local currencies. However, the strengthening of the Malaysian Ringgit against these currencies significantly dampened the reported growth when translated back for reporting.
Profit Before Tax (PBT)
Q1 FY2026 (ended 31 May 2025)
RM123.1 million
Q1 FY2025 (ended 31 May 2024)
RM136.3 million
The Group’s Profit Before Tax (PBT) saw a decrease of 9.7%. This was primarily attributed to foreign exchange losses. Furthermore, the previous year’s corresponding quarter benefited from the recognition of an approved refund on indirect tax, which made the year-on-year comparison appear steeper.
Net Profit Attributable to Owners (PATAMI)
Q1 FY2026 (ended 31 May 2025)
RM73.9 million
Q1 FY2025 (ended 31 May 2024)
RM85.6 million
Earnings Per Share (EPS)
Q1 FY2026 (ended 31 May 2025)
1.49 sen
Q1 FY2025 (ended 31 May 2024)
1.72 sen
The drop in profitability directly translated to lower earnings per share for the quarter.
Business Performance and Financial Health
The ‘Health and wellness consumer products’ segment remains the powerhouse of DXN, contributing RM469.0 million, or nearly all of the group’s external revenue. This underscores the company’s strong focus on its core offerings like fortified foods, beverages, and health supplements.
Looking at the balance sheet, DXN maintains a stable net asset per share of RM0.27. However, its cash and cash equivalents saw a notable decrease to RM546.9 million from RM672.2 million in the previous quarter. The cash flow statement reveals this was mainly due to significant dividend payments to shareholders (RM99.4 million) and the adverse impact of foreign exchange fluctuations on cash holdings.
Navigating Risks and Charting the Course for Growth
The company acknowledges a complex global landscape. Key risks highlighted in the report include ongoing geopolitical tensions, unpredictable foreign exchange fluctuations, and inflationary pressures that could disrupt supply chains and impact operations.
In response, DXN is not standing still. The management emphasized its proactive risk management strategies. More importantly, the company is pushing forward with its growth agenda. This includes diversifying its product line with a focus on functional wellness and immunity solutions. Geographically, DXN is expanding its global footprint with new facilities planned in Peru and Morocco, and a new expansion into Kelantan, Malaysia, aiming to enhance market access and logistical efficiency.
Shareholder Returns: A Positive Note
In a move that will please investors, the Board of Directors declared a first interim dividend of 0.90 sen per ordinary share for the financial year ending 28 February 2026. The dividend will be paid on 29 August 2025.
Summary and Outlook
In summary, DXN’s first-quarter results for FY2026 showcase a company with a resilient core business capable of generating steady revenue. However, its profitability is currently susceptible to external macroeconomic factors, particularly the strengthening Ringgit. The dividend declaration signals confidence and a continued commitment to shareholder returns.
Looking ahead, the company’s strategic focus on product innovation and aggressive global expansion provides a clear roadmap for long-term growth. While near-term challenges persist, these initiatives are designed to bolster its market position and operational scale in the global wellness sector. Investors should keep an eye on the following key factors:
- Foreign Exchange Volatility: The strength of the Malaysian Ringgit against other market currencies will continue to be a significant factor for reported earnings.
- Geopolitical and Economic Stability: Global events, particularly in key markets, could impact supply chains and consumer demand.
- Execution of Expansion Plans: The successful and timely rollout of new facilities in Peru, Morocco, and Malaysia will be crucial for future growth.
From a professional standpoint, this report highlights the classic dilemma for a Malaysian-based global company: strong operational performance in foreign markets can be masked by currency translation effects. DXN’s focus on expanding its physical presence in key growth regions like Latin America and North Africa is a logical strategy to build a more resilient, geographically diversified business for the long run.
What are your thoughts on DXN’s strategy to expand into new markets like Peru and Morocco? Do you believe this will effectively counteract the forex challenges in the long term?
Share your views in the comments below!
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