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