Zetrix AI withdraws dividend days before entitlement date amid financial pressures [WATCH]

KUALA LUMPUR: Zetrix AI Bhd has withdrawn its first interim dividend of 0.25 sen per share, just days before its scheduled entitlement date, as it seeks to preserve working capital amid mounting financial pressures.

In a filing with Bursa Malaysia, the company said its board had decided to withdraw the dividend due to unexpected operational expenses.

"The board's decision is intended to preserve the company's working capital due to unexpected operational expenses," it said.

Zetrix AI did not disclose the nature or amount of the expenses.

The dividend, declared on Aug 24, was scheduled to go ex-dividend on Thursday (Oct 22), with the entitlement date set for Oct 23 and payment due on Nov 20.

The withdrawal could allow Zetrix AI to conserve an estimated RM20 million in cash, based on its estimated 8.08 billion ordinary shares.

In a separate filing, Zetrix AI said trading in its securities was halted from 9am to 10am. The stock last closed at 5.5 sen.

The dividend withdrawal comes after MARC Ratings downgraded the company's RM2 billion Islamic medium-term notes programme to BB+IS from AA-IS, while maintaining its MARCWatch "Negative" status.

The rating agency cited a significant deterioration in the group's credit profile, including growing liquidity concerns, governance uncertainties and a potential breach of its sukuk covenant.

The potential breach arose after managing director Wong Thean Soon ceased to be the company's single largest shareholder following forced selling of pledged shares.

Under the sukuk terms, Wong is required to remain the single largest shareholder.

Zetrix AI has until Oct 22 to remedy the potential breach, failing which the consent or direction of sukukholders would need to be sought.

MARC Ratings also raised concerns over the group's proposed Nasdaq listing, which could be delayed to the first quarter of 2027.

Part of the proceeds from the proposed listing is intended to support sukuk repayment, although the transaction remains subject to execution risks.

The dividend withdrawal contrasts with Zetrix AI's financial performance, when it reported a 35 per cent increase in second-quarter net profit to RM269.3 million.

Revenue rose 38.6 per cent to RM426.7 million, supported by contributions from its artificial intelligence and blockchain businesses.

For the first six months of 2026, the company recorded a net profit of RM540.58 million.