NexG slumped into Q1 loss on lower passport demand

NexG Bhd reported a net loss of RM2.82 million for Q1 FY27, a stark contrast to its RM64.88 million profit in the same period last year. Revenue fell 44.3% year-on-year to RM49.24 million, primarily due to reduced demand for smart cards, passports, and personalisation services. The core segment's revenue dropped to RM29.99 million from RM70.14 million.

The company also faced a pre-tax loss of RM3.44 million, with fair value losses on investments and reduced product supplies contributing to the decline. Despite the overall quarterly loss, NexG's pre-tax loss narrowed by 88% compared to Q4 FY26. Operating losses also decreased due to reduced fair value losses on other investments, with the basic loss per share being 0.06 sen, down from 2.01 sen a year ago.

The company did not declare a dividend. NexG welcomed the Malaysian government's decision not to move forward with a proposed acquisition of its subsidiary, Datasonic Technologies Sdn Bhd (DTSB), which provides clarity for the group to focus on its existing operations and strategic plans. The funds from a private placement exercise in May 2026 were mainly deployed for ongoing and future projects, acquiring factory space and machinery, repaying bank borrowings, and funding research and development.

As of June 30, 2026, NexG had RM109.57 million in cash and cash equivalents, while total borrowings were reduced to RM31.55 million. The company sees cautious optimism for the future, citing resilient domestic economic activity and infrastructure projects. NexG remains at 27 sen per share, valuing the group at RM1 billion, after a 23.94% drop over the past five days.