MAINBOARD-LISTED Nanofilm Technologies : MZH -1.9%, which specialises in advanced materials and coatings, reported a loss of S$7.6 million for the first half of 2023, compared with a profit of S$18.8 million in the year-ago period.

 

Revenue plummeted 34.4 per cent to S$73.2 million, from S$111.3 million the previous year &ndash driven by decreases in its industrial equipment, nanofabrication and advanced materials business units, said the group in a bourse filing on Thursday (Aug 10).    

 

Revenue from its industrial equipment business unit had more than halved to S$8.9 million, from S$19.5 million a year ago. That of the nanofabrication unit declined 36.2 per cent year on year to S$4.7 million, from S$7.3 million. Both came on the back of lower sales, said Nanofilm.

 

Meanwhile, the advanced materials unit revenue dropped 29.9 per cent year on year to S$59.3 million, from S$84.5 million. The group attributed this to lower revenue contributions from its computer, communication and consumer (3C) product segments. 

 

The losses were slightly offset by revenue growth in the group&rsquo s Sydrogen business unit, which climbed to S$377,000 from S$15,000. 

 

Administrative expenses also rose by 18.1 per cent to S$21.9 million for the half-year, from S$18.5 million the previous year. This was largely due to an increase of S$1.2 million in depreciation and amortisation expenses in the group&rsquo s Singapore office, as well as an increase of S$1.1 million in professional and consultancy fees, said Nanofilm. 

 

Finance costs doubled as well to S$1 million in H1, from S$0.5 million a year ago, on higher interest expenses and lease liabilities. 

 

Loss per share came in at S$0.0117 per share, from earnings per share of S$0.0286 a year ago. 

 

Nanofilm highlighted that the operating environment remains challenging, especially as demand for consumer electronics dampens. This is exacerbated by macroeconomic uncertainties and geopolitical tensions, it said. 

 

&ldquo Lower revenue coupled with a higher cost base for the group, mainly from a combination of increased manpower and higher depreciation expenses incurred for future growth capacity and business initiatives, have resulted in weaker financial performance.&rdquo  

 

The group has implemented cost-reduction measures to mitigate these challenges, and will continue exploring ways to create shareholder value, it added. 

 

Looking ahead, Nanofilm believes that revenue in the next half-year will be higher than in H1, barring any unforeseen circumstances. 

 

&ldquo However, H2 2023 will not be comparable to H2 2022 due to the uncertain macro environment,&rdquo it said. &ldquo The full-year profitability of the group is subject to the level of demand from end-consumers in the upcoming new 3C product launches, and customers&rsquo capital expenditures not (being) further tightened.&rdquo