Nanofilm’s 9M revenue declines 29% amid dampened consumer sentiment

NANOFILM Technologies on Tuesday (Nov 7) posted a 29 per cent year-on-year decline in group revenue, to S$128 million for the nine months ended Sep 30, 2023.

In its third-quarter business update, the nanotechnology solutions provider said: “The operating environment for Q3 2023 continued to be challenging, exacerbated by macro headwinds and the dampening of overall consumer sentiment.”

Nanofilm noted that there was an uptick in operational activity in the third quarter, driven by the seasonal peak period for the computer, communication and consumer (3C) segment. Still, this was lower than the corresponding increase a year earlier.

It added that gross profit declined 28 per cent year on year over the same period as lower production volumes led to reduced economies of scale.

The group said that, over the first nine months of the year, it rebalanced capacity to address excess capacity at its Shanghai plants, which came about due to the lower utilisation of certain equipment. “This equipment will be redeployed to other locations, while the group will continue to utilise its Shanghai plants for multiple business units that leverage demand from the China market,” it said.

Nanofilm added that it is building up its functional thin-film coating solutions for industrial applications in Europe.

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“The European market and original equipment manufacturers in the region are early technology adopters and embrace advanced technologies that add value and differentiate their products and services, making them prospective customers for Nanofilm’s cost-leading advanced technologies,” the group said. It added that this will be supplemented by selective inorganic growth opportunities.

Still, Nanofilm said that its financial performance will remain dependent on end-consumer demand for new 3C product launches.

Nanofilm shares closed down 6.3 per cent or S$0.065 at S$0.965 on Tuesday, before the release of the business update.