N2N Connect Berhad Q1 2026 Financial Results: Detailed Investor Update

Executive Summary

N2N Connect Berhad has released its unaudited consolidated financial results for the first quarter ended 31 March 2026. The quarter reflects a challenging operating environment, with notable declines in revenue and profit compared to the previous year, but the company maintains a strong equity position and remains cautiously optimistic for the year ahead.

Key Financial Highlights

• Revenue: RM20.67 million for Q1 2026, a 20% decrease from RM25.94 million in Q1 2025.
• Profit Before Tax: RM3.18 million, down 41% from RM5.42 million in Q1 2025.
• Profit Attributable to Owners: RM2.85 million, also down from RM4.64 million in Q1 2025.
• Earnings Per Share (EPS): 0.51 sen (Q1 2025: 0.83 sen).
• No dividends declared for the quarter.
• Net Assets Per Share: 45 sen (up from 44 sen at year end).
• Cash and Bank Balances: RM71.85 million, indicating a strong liquidity position.
• Share of Associate’s Results: RM1.81 million contributed positively, up 30% year-on-year.
• Total Equity: RM252.08 million, up from RM245.74 million at 31 Dec 2025.

Segmental Performance and Business Drivers

• Malaysia and Regional Segments:
  • Malaysian revenue: RM10.58 million; Regional revenue: RM10.09 million.
  • Regional segment (which includes Hong Kong, Singapore, Australia, and Indonesia) contributed the majority of profit (RM2.84 million), compared to a small loss in Malaysia.
• Revenue Decline Factors: The 20% drop in revenue is mainly due to lower one-time implementation fees, reduced subscription and transaction-based trading solutions, and a weaker info terminal business.
• Profitability: Lower gross profit, higher net foreign exchange losses, and lower operating expenses, taxation, and higher contribution from associates all influenced the quarter’s profitability.
• Cost Management: Operating expenses decreased by 7% year-on-year. Depreciation and amortisation increased to RM2.72 million (Q1 2025: RM2.41 million).
• Foreign Exchange Losses: The Group reported a net forex loss of RM101,000 (Q1 2025: RM558,000 net gain).

Balance Sheet and Cash Flow Position

• Assets: RM276.05 million (up from RM274.64 million as at 31 December 2025).
• Cash Flow: Net cash used in operating activities was RM0.81 million (Q1 2025: RM2.11 million generated). Cash used in investing activities increased to RM4.87 million (Q1 2025: RM2.95 million), mainly due to computer software development, purchase of property, plant and equipment, and investment in associate.
• Strong Liquidity: Cash and bank balances of RM71.85 million.
• Working Capital: Notable movements include higher trade receivables and lower trade payables.

Corporate Actions and Material Events

• No dividends declared or paid during the quarter.
• Acquisition: On 15 January 2026, the Group (via Global Fin Net Sdn Bhd) acquired a 33% stake in Asia Travel Soft Sdn Bhd for RM1 million. Asia Travel Soft Sdn Bhd is now classified as an associate, but this acquisition is not expected to have a material impact on the Group’s financial position or performance.
• Material Litigation:
  • A major ongoing civil suit involves allegations of breach of intellectual property rights, copyright, and trade secrets, among other claims, against several individuals and companies. The case has seen several appeals and orders, including the reinstatement of an Anton Piller Order (APO) by the Federal Court in April 2024, which allows the Group to search the defendants’ premises for evidence.
  • The litigation is ongoing, with trial dates set throughout 2026. The Board, after consulting legal counsel, does not expect a material adverse effect on the Group’s financial position from these proceedings at this time.
• No new corporate proposals, capital commitments, or major related party transactions during the period.

Macroeconomic and Outlook Commentary

• IMF Outlook: The April 2026 IMF World Economic Outlook projects global growth at 3.1% for 2026, down from earlier forecasts, reflecting heightened geopolitical and trade risks.
• Malaysia: Projected to grow moderately between 4% to 5% (IMF forecast at 4.7% for 2026). The KLCI index improved by 0.6% in early 2026 despite ongoing uncertainties.
• Management’s View: The Group is cautiously optimistic and expects improved performance for FY2026, barring unforeseen circumstances.

Potential Price Sensitive Issues for Shareholders

• Material Litigation: The ongoing court case, while not expected to impact the Group’s finances materially, remains an overhang and should be closely monitored for any potential developments.
• Revenue and Profit Decline: The significant drop in revenue and profit, especially in the core Malaysian operations, could influence investor sentiment.
• Strong Balance Sheet: The Group’s robust liquidity and strong equity base may provide support in navigating ongoing challenges and pursuing strategic opportunities.
• No Dividend Declaration: The absence of dividends for the quarter may disappoint some investors seeking yield.

Conclusion

N2N Connect Berhad faces a challenging operational environment, reflected in lower revenues and profits for Q1 2026. However, the company maintains a strong financial position, continues to invest in technology and associates, and remains resilient in the face of external uncertainties. Shareholders should monitor the outcome of the ongoing litigation and management’s efforts to improve business performance in the coming quarters.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to review the official filings and consult their financial advisors before making any investment decisions.

Versi Bahasa Malaysia

Keputusan Kewangan Suku Pertama 2026 N2N Connect Berhad: Laporan Terperinci untuk Pelabur

Ringkasan Eksekutif

N2N Connect Berhad telah mengumumkan keputusan kewangan suku pertama tidak diaudit bagi tempoh berakhir 31 Mac 2026. Suku ini menunjukkan cabaran persekitaran operasi, dengan penurunan hasil dan keuntungan berbanding tahun sebelumnya, namun syarikat mengekalkan kedudukan ekuiti yang kukuh dan kekal optimis untuk tahun hadapan.

Fakta Kewangan Utama

• Hasil: RM20.67 juta bagi S1 2026, turun 20% daripada RM25.94 juta (S1 2025).
• Untung Sebelum Cukai: RM3.18 juta, turun 41% dari RM5.42 juta (S1 2025).
• Keuntungan Kepada Pemilik: RM2.85 juta (S1 2025: RM4.64 juta).
• Keuntungan Sesaham: 0.51 sen (S1 2025: 0.83 sen).
• Tiada dividen diisytiharkan untuk suku ini.
• Aset Bersih Sesaham: 45 sen (naik dari 44 sen pada akhir tahun).
• Tunai dan Bank: RM71.85 juta, menunjukkan kedudukan kecairan yang kukuh.
• Sumbangan Keuntungan Syarikat Bersekutu: RM1.81 juta (+30% tahun ke tahun).
• Jumlah Ekuiti: RM252.08 juta (31 Dis 2025: RM245.74 juta).

Prestasi Segmen dan Pemacu Perniagaan

• Segmen Malaysia & Serantau:
  • Hasil Malaysia: RM10.58 juta; Serantau: RM10.09 juta.
  • Segmen serantau (Hong Kong, Singapura, Australia, Indonesia) menyumbang majoriti keuntungan (RM2.84 juta), berbanding kerugian kecil di Malaysia.
• Faktor Penurunan Hasil: Penurunan 20% disebabkan yuran pelaksanaan sekali, penyelesaian langganan, dan perniagaan info terminal yang lebih lemah.
• Keuntungan: Keuntungan kasar yang lebih rendah, kerugian tukaran mata wang asing yang lebih tinggi, disokong oleh kos operasi dan cukai yang lebih rendah serta sumbangan lebih tinggi daripada syarikat bersekutu.
• Pengurusan Kos: Kos operasi turun 7% berbanding tahun lepas. Susut nilai dan pelunasan meningkat kepada RM2.72 juta (S1 2025: RM2.41 juta).
• Kerugian Forex: Kerugian tukaran asing bersih RM101,000 (S1 2025: RM558,000 keuntungan bersih).

Kedudukan Kunci Kira-kira & Aliran Tunai

• Aset: RM276.05 juta (31 Dis 2025: RM274.64 juta).
• Aliran Tunai: Penggunaan tunai operasi RM0.81 juta (S1 2025: RM2.11 juta diperolehi). Aliran tunai pelaburan meningkat kepada RM4.87 juta (S1 2025: RM2.95 juta), terutamanya untuk pembangunan perisian, pembelian aset, dan pelaburan syarikat bersekutu.
• Kecairan Kukuh: Tunai dan bank RM71.85 juta.
• Modal Kerja: Perubahan ketara termasuk penghutang perdagangan lebih tinggi dan penghutang perdagangan lebih rendah.

Tindakan Korporat & Acara Penting

• Tiada dividen diisytiharkan atau dibayar dalam suku ini.
• Pemerolehan: Pada 15 Januari 2026, Kumpulan (melalui Global Fin Net Sdn Bhd) memperoleh 33% kepentingan dalam Asia Travel Soft Sdn Bhd dengan RM1 juta. Pemerolehan ini tidak dijangka memberi impak material kepada kewangan Kumpulan.
• Litigasi Material:
  • Saman sivil utama melibatkan tuduhan pelanggaran hak harta intelek, hak cipta, dan rahsia dagangan terhadap individu dan syarikat. Kes ini masih berjalan, dengan beberapa perintah mahkamah termasuk pengembalian semula Anton Piller Order (APO) oleh Mahkamah Persekutuan pada April 2024.
  • Prosiding diteruskan sepanjang 2026. Lembaga tidak menjangka impak kewangan material dari perkembangan ini.
• Tiada cadangan korporat baharu, komitmen modal, atau urus niaga pihak berkaitan utama dalam tempoh ini.

Komen Makroekonomi & Prospek

• IMF: Unjuran pertumbuhan global 3.1% untuk 2026, turun dari unjuran sebelumnya, mencerminkan ketidaktentuan geopolitik dan perdagangan.
• Malaysia: Diunjurkan tumbuh secara sederhana antara 4% hingga 5% (IMF: 4.7% untuk 2026). Indeks KLCI meningkat 0.6% awal 2026 walaupun ketidaktentuan berterusan.
• Pandangan Pengurusan: Kumpulan kekal optimis dan menjangkakan prestasi lebih baik untuk tahun kewangan 2026, selagi tiada halangan tidak dijangka.

Perkara Sensitif Harga untuk Pemegang Saham

• Litigasi Material: Prosiding mahkamah yang masih berjalan, walaupun tidak dijangka menjejaskan kewangan, perlu dipantau rapi untuk sebarang perkembangan.
• Penurunan Hasil & Keuntungan: Penurunan ketara hasil dan keuntungan, khususnya di Malaysia, mungkin mempengaruhi sentimen pelabur.
• Penyata Kewangan Kukuh: Kedudukan tunai dan ekuiti kukuh boleh menyokong Kumpulan menghadapi cabaran dan merebut peluang strategik.
• Tiada Dividen: Ketiadaan dividen untuk suku ini boleh mengecewakan pelabur yang mencari pulangan.

Kesimpulan

N2N Connect Berhad menghadapi cabaran operasi, dengan hasil dan keuntungan yang lebih rendah untuk S1 2026. Walau bagaimanapun, syarikat mengekalkan kedudukan kewangan kukuh, terus melabur dalam teknologi dan syarikat bersekutu, dan kekal berdaya tahan dalam menghadapi ketidaktentuan. Pemegang saham wajar memantau perkembangan litigasi dan usaha pengurusan dalam menambah baik prestasi perniagaan pada suku akan datang.

Penafian: Artikel ini adalah untuk tujuan maklumat sahaja dan bukan nasihat pelaburan. Pelabur dinasihatkan meneliti laporan rasmi dan berunding dengan penasihat kewangan sebelum membuat sebarang keputusan pelaburan.

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