Nanofilm sinks into red with S$7.6 million loss in H1
Ry-Anne Lim
MAINBOARD-LISTED Nanofilm Technologies , 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 – 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’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’s Singapore office, as well as an increase of S$1.1 million in professional and consultancy fees, said Nanofilm.
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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.
“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.”
The group has implemented cost-reduction measures to mitigate these challenges, and will continue exploring ways to create shareholder value, it added. Nanofilm believes that revenue in the next half-year will be higher than in H1, barring any unforeseen circumstances. “However, H2 2023 will not be comparable to H2 2022 due to the uncertain macro environment,” it said. “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’ capital expenditures not (being) further tightened.”
Shares of Nanofilm closed at S$1.03, down 1.9 per cent or S$0.02, on Thursday, prior to the announcement.
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