Multi-Chem has posted earnings of $7.1 million in its 3QFY2024 ended September, 23% lower y-o-y.

 

Revenue decreased by a slight 0.2% y-o-y to $173.3 million.

 

Gross profit was down 16% y-o-y to $21.04 million, mainly due to the decrease in gross profit margin and increase in inventories written off by $376,000 to $405,000 in 3QFY2024.

 

Cash and cash equivalents decreased by $5.2 million to $67.8 million, mainly due to increase in dividends paid to shareholders. 

 

For growth, Multi-Chem AWZ will focus on its best-of-breed products and will continue to look out for opportunities for regional expansion to deepen our regional operations. 

 

The company will also promote the M.Tech brand name and intends to work closely with key partners to further promote the products. 

Between Aug 15 and 21, Multi-Chem : AWZ -0.35% CEO Foo Suan Sai sold 151,300 shares at an average price of S$2.84. This decreased his total interest from 68.81 per cent to 68.65 per cent. It followed disposals the preceding week at an average price of S$2.83 per share. Prior to the sales, his previous transaction on the open market was an acquisition of 9,900 shares on Jun 13 at an average price of S$2.37 per share.

 

Foo is one of the founding shareholders of Multi-Chem. He has more than 30 years of experience in the printed circuit board industry. He is currently responsible for the overall direction and development of the group.

Between Aug 8 and Aug 13, Multi-Chem : AWZ 0% CEO Foo Suan Sai disposed of 344,400 shares at an average price of S$2.83. This decreased his total interest from 69.21 per cent to 68.82 per cent. His previous transaction on the open market was an acquisition of 9,900 shares on Jun 13 at an average price of S$2.37 per share.

 

Foo is a founding shareholder of Multi-Chem with more than 30 years of experience in the printed circuit board (PCB) industry. He is currently responsible for the overall direction and development of the group.

 

Prior to his acquisitions, Multi-Chem had reported that the group revenue for the 2024 financial year&rsquo s first half (ended Jun 30) had increased 9.4 per cent from H1 FY2023, to S$342.5 million. This saw the group achieve H1 FY2024 profit after tax of S$16.4 million, compared with S$11.4 million in the same period the year before. For its FY2023, the group reported profit after tax of S$27.1 million compared with S$20 million in FY2022.

 

With a market capitalisation of S$254 million as at Aug 14, the stock maintains a return-on-equity ratio of 22 per cent, and a price-to-earnings ratio of 7.9 times. Cash and cash equivalents stood at S$52.4 million with no bank borrowings at the company level as at Jun 30. The stock has seen its average daily turnover advance to near S$50,000 this year, more than trebling 2023 levels.

 

For over three decades, Multi-Chem has served as a value-added supplier to PCB manufacturers. Since 2002, Multi-Chem has been distributing IT products through the M.Tech Group which has now become the main business for the Multi-Chem group.

 

M.Tech is a regional distributor of cybersecurity and network-performance products. It has a presence in 27 cities across 14 countries, and its products have become the primary business for Multi-Chem, now contributing more than 99 per cent of its revenue.

 

Multi-Chem maintains it strategically focuses on selling and promoting only top-tier IT products. Currently, it offers industry-leading IT products from vendors such as Check Point, Cisco, CyberArk, Imperva, Trellix (formerly McAfee), Tufin, Proofpoint, RSA, SolarWinds, Symantec (a division of Broadcom), and Trend Micro.

 

To enhance technical competency internally and train its partners, certified IT training is provided through the Education Services Division of M.Tech Products, which is authorised to conduct Check Point courses. This training business complements the core IT distribution business and is expected to increase awareness and technical knowledge through the courses offered.

 

Mapletree Industrial Trust and Mapletree Pan Asia Commercial Trust

Chua Tiow Chye serves as non-executive director of the manager of Mapletree Industrial Trust : ME8U +1.31% and the manager of Mapletree Pan Asia Commercial Trust : N2IU +2.42% (MPACT). He increased his interest in both Reits on Aug 7. He acquired 110,000 units of Mapletree Industrial Trust at S$2.24 a unit, and 200,000 units of MPACT at S$1.25 per unit. Chua maintains a 0.06 per cent interest in Mapletree Industrial Trust and 0.07 per cent interest in MPACT.

 

As deputy group CEO of Mapletree Investments, Chua is instrumental in propelling the group&rsquo s strategic initiatives, particularly in expanding and steering its international real estate investments and developments. His previous roles within the group include leading the global lodging sector and the private capital management function. He has also served as the group chief investment officer and the regional CEO of North Asia and new markets.

 

His other past leadership roles include being the CEO of the manager of Mapletree Logistics Trust. Before his tenure at Mapletree, which began in 2002, Chua held senior positions at Vision Century Corporation, Ascendas, Singapore Food Industries, and UOB.

Multi-Chem AWZ 0.00% has announced earnings of $27.1 million for the FY2023 ended Dec 31, 2023, a 36% increase over its earnings of $20.0 million in FY2022. 

 

Earnings per share also increased to 30.1 cents for FY2023, compared to 22.2 cents in the previous financial year.

 

For the full-year period, revenue was up 7% y-o-y in FY2023 to $658.4 million, with cost of sales also increasing 6% y-o-y to $568.5 million.

 

As a result, gross profit posted a 10% y-o-y improvement to $90.0 million in FY2023. 

 

Despite its name, Multi-Chem' s core business now is the distribution of IT hardware and software, as well as in electronics manufacturing.

 

The company attributes the higher margins to lower allowances made for obsolete inventory and staffing costs in 2HFY2023. There was also a decrease in net foreign exchange losses compared to 2HFY2022, when the company recorded $2.6 million in forex losses.

 

See also: APAC Realty' s earnings drop 59.9% y-o-y for the FY2023, a continuous decline for two consecutive years

 

Multi-Chem has declared a final dividend of 15.5 cents for FY2023. Including the interim dividend of 8.8 cents paid last year, total dividends for the whole of FY2023 come to 24.3 cents. The company paid a total of 17.7 cents in FY2022 and 11.1 cents in FY2021.

 

As at Dec 31, 2023, cash and cash equivalents stood at $73.0 million.

 

Despite the IT business being dependent on geopolitical and macroeconomic events, Multi-Chem notes that IT is still a critical requirement in businesses and security will continue to remain an integral part of the IT infrastructure.

 

To create growth, the company says it will focus on " best-of-breed" products and will continue to look out for opportunities for regional expansion.

 

Multi-Chem grew its revenue for 2HFY2022 by 3% to $315.1 million. However, because of lower margins, earnings dropped by 23% y-o-y to $10.3 million.

 

For the full year, earnings decreased by 20% to $20 million. Revenue was up 2% for FY2022 to $617 million.

 

Despite lower earnings versus FY2021, Multi-Chem plans to pay a much higher dividend of 17.7 cents for the whole of FY2022. In contrast, it paid 11.1 cents for the preceding FY2021.

 

The company attributes the lower margins to unfavourable forex movements that cost $2.6 million in forex losses, as well as allowance made for obsolete inventory.

 

Despite the name, Multi-Chem' s core business now is the distribution of IT hardware and software. It is in electronics manufacturing too.

 

Multi-Chem warns that the near term outlook in the IT business is dependent on events such as those political or economic in nature and such events could affect business in certain markets.

 

" With the current inflation peaking, rising interest rates and the Russian-Ukraine conflict, the global economic outlook remains uncertain which in turn will affect the group&rsquo s business.

 

" However, IT is still a critical requirement in businesses and security will continue to remain an integral part of the IT infrastructure. This should augur well for the Group&rsquo s business," adds Multi-Chem.

 

To eke out growth, Multi-Chem will focus on so-called " best-of-breed" products and will continue to look out for opportunities for regional expansion.

 

Multi-Chem, whose main business is in the distribution of IT products, has announced earnings of $9.7 million for the 1HFY2022 ended June, 17% lower than the earnings of $11.6 million in the same period the year before.

 

Revenue for the six-month period increased by 1.1% y-o-y to $301.9 million on the back of slightly higher revenue from the company&rsquo s IT division and printed circuit board (PCB) division.

 

Gross profit fell by 2% y-o-y to $41.8 million mainly due to the higher allowance for inventory obsolescence of $877,000 from $1.2 million in the 1HFY2021 to $2.0m in the 1HFY2022 based on the review of inventory obsolescence performed as at June 30.

 

This resulted in a 0.4 percentage point decrease in gross profit margin to 13.9% in the 1HFY2022. Excluding the allowance for inventory obsolescence, Multi-Chem&rsquo s gross profit margin would have been at 14.5% for the 1HFY2022, down 0.2 percentage points y-o-y.

 

The company&rsquo s earnings per share (EPS) for the 1HFY2022 stood at 10.71 cents on a fully diluted basis.

 

Its net asset value (NAV) per share stood at 150.75 cents in the same period.

 

Multi-Chem has declared an interim dividend of 6.60 cents per share, which will be paid on Sept 9. The period&rsquo s interim dividend is 2.4 cents higher than the interim dividend of 4.20 cents in the 1HFY2021.

 

Cash and cash equivalents stood at $71.9 million as at June 30.

 

Between Mar 22 and 23, Multi-Chem Multi-Chem : AWZ -4.19% executive director and general manager Foo Fang Yong acquired 84,400 shares of the company at an average price of S$1.86 per share. With a consideration of S$156,751, this doubled his direct interest in the value-added supplier to PCB manufacturers from 0.09 per cent to 0.18 per cent.

 

On Feb 18, Multi-Chem reported that for its FY21 (ended Dec 31) the group achieved revenue of S$603.6 million, a year-on-year increase of 25.8 per cent compared to revenue of S$479.7 million in FY20.

 

Foo was appointed a director of Multi-Chem in May 2015. Incorporated in 1985, Multi-Chem was listed on Sesdaq in January 2000, and upgraded to the Mainboard in November 2000. In May 2002, the group diversified into the business of IT distribution.

MAINBOARD-LISTED Multi-Chem reported on Friday (Feb 18) a 28 per cent increase in H2 net profit on the back of higher revenue.

 

Net profit for the 6 months ended Dec 31, 2021 rose to S$13.4 million from S$10.5 million in the prior-year period revenue rose 20 per cent to S$305.1 million.

 

The company' s activities include the distribution of IT products and provision of value-added printed circuit board (PCB) manufacturing services to PCB fabricators.

 

For the full-year, revenue was up 26 per cent to S$603.6 million net profit also improved 40 per cent to S$25 million.

 

The company noted that revenue in its IT distribution business increased by 26 per cent to S$601.5 million in 2021, mainly due to the increase in customer demand and some big transactions closed during the year.

 

Earnings per share for the full year stood at S$0.277, better than the S$0.1973 recorded in FY2020. Net asset value per share for the group as of Dec 31, 2021 stood at S$1.4451, an improvement from S$1.2712 a year earlier.

 

A final dividend of S$0.069 was proposed, which would take total dividend for the year to S$0.111, an improvement from the S$0.066 total dividend in 2020.

 

In its outlook, the company noted that the Covid-19 pandemic may cause uncertainties in the economic outlook, but added that IT is still a critical requirement in businesses and security would continue to remain an integral part of the IT infrastructure.

 

" This should augur well for the group' s business," it said.

 

Multi-Chem shares closed at S$1.84 on Friday, up 0.5 per cent, before the earnings announcement.

 

For the 2HFY2020 ended December, Multi-Chem saw earnings increase 171% y-o-y to $10.5 million from $3.9 million a year ago.

 

This brings earnings per share (EPS) to 11.61 cents on a fully diluted basis for the 2HFY2020 compared to 4.28 cents the year before.

 

Revenue for the half-year period fell 1.2% y-o-y to $253.7 million, while FY2020 revenue grew 5.2% y-o-y to $455.8 million.

 

The IT Distribution business saw revenue drop 1.3% y-o-y to $252.6 million for the 2HFY2020. For the FY2020, IT Distribution saw revenue increase by 12.3% y-o-y due to the increased reliance on digital technologies during Covid-19.

 

Revenue in the PCB division increased slightly, by $84,000 to $1.1 million in 2HFY2020. In FY2020, revenue in the division fell by 8.0% y-o-y to $2.2 million due to lower customer demands and reduction of manufacturing capacity of the group resulting from customer demands and reduction of manufacturing capacity of the group due to the disposal of the remaining two laser machines in Singapore during the period.

 

For the 2HFY2020, the group registered profit before tax of $14.9 million, compared to the $7.5 million in 2HFY2019.

 

This was due to an increase in gross profit of $2.8 million due to the $1.0 million grant from the government from the Covid-19 pandemic.

 

The group also reported net foreign exchange gains of $1.9 million in 2HFY2020 compared to net foreign exchange loss of $490,000 in the year before, mainly due to the depreciation of the US dollar against the local currencies and the appreciation of the RMB against the SGD in 2HFY2020.

 

Excluding the net foreign exchange difference, PBT stood at $13.0 million.

Cash and cash equivalents stood at $67.6 million as at Dec 31, 2020.

 

Looking ahead, the group says it will &ldquo focus on its best-of-breed products and will continue to look out for opportunities for regional expansion&rdquo .

 

It adds that it will be &ldquo selective of the products we carry so as to be able to do the best for the principals that the M.Tech companies represent. The group will also promote the M.Tech brand name and intends to work closely with key partners to further promote the products.&rdquo