DNeX looking at renewable energy

KUALA LUMPUR: IT services firm Dagang NeXchange Bhd (DNeX), which is targeting a double-digit growth in both earnings and revenue in 2017, will focus on the power business, which it just ventured into last year.
“Renewable energy is a sector we are looking into. Going forward there will be capital expenditure (capex) plan for our power sector,” group managing director Zainal Abidin Jalil told reporters after the company’s AGM yesterday.
As this point, DNeX is looking for opportunities for independent power producer (IPP) projects in neighbouring Indonesia which it terms as having a “hunger for power”, as the country presents opportunities in the form of large number of deals and tenders along with a tariff which Zainal claims is “better than other places.”
Currently, DNeX is engaged in direct negotiations for two mini hydro power plants with a capacity of two and three megawatts (MW) respectively, while also preparing to bid for a geothermal project in the country.
Domestically, it is preparing its bid for a 30MW solar power plant project commissioned by the Energy Commission for which, it is expected to submit its tender bid in August or September this year.
Zainal said the group prefers small-scale IPP projects namely below 30MW, in line with its strategy to stay below the radar rather than to compete with larger-scale IPP companies.
While IT business is the main revenue contributor, he is hoping DNeX will see an equal contribution from both IT and power businesses going forward. The company’s net profit jumped nearly 12 fold to RM133.74 million in 2016 on the back of a 86.8% rise in revenue to RM178.46 million.
This year, DNeX will be deploying a smaller capex of less than RM50 million, which is “within its financial capacity” compared with RM125 million last year, whereby a bulk of which was spent on the acquisitions of Ping Petroleum UK Ltd and OGPC Group.
DNex’s 51%-owned subsidiary DNeX RFID Sdn Bhd, was recently appointed as the project consultant by TIFFA EDI Services Co Ltd for the Road Charge Vehicle Entry Permit System for the Thailand-Malaysia border and any other borders to Thailand.
“The Vehicle Entry Permit is an opportunity we can expand regionally as well, where if we are lucky and given the chance to do the permit project for the Ministry of Transport of Malaysia, I think we can also do the same thing for the Ministry of Transport of Thailand. That is our near term target market focus area” Zainal said.
The company also recently bagged a five year subcontract worth RM104.3 million to operate and manage the Vehicle Entry Permit and Road Charges System Project involving foreign-registered vehicles entering Malaysia via Johor.