Chemicals distributor and manufacturer Megachem 5DS has reported a 24.1% drop in earnings for FY2022 to $6.1 million, despite higher revenue.
The company enjoyed a 3.5% increase in revenue to a record of $143.7 million because of higher demand but higher interest costs, absence of government grants as well as poorer showing by its associates dragged the bottomline down.
The company plans to pay a final dividend of 1.2 cents, which will bring full year payout to 2 cents per share, representing a payout ratio of 45.4%.
“We are encouraged to have achieved a new record in our revenue, buoyed by good growth in our largest Asean market, and other significant regions including Australia and the Middle East,” says managing director Sidney Chew.
“Notably, the chemical industry saw escalated demand in the first half of 2022 but showed signs of slowdown towards the end of 2022 as companies started to destock their inventory. Nonetheless, the global-wide high interest rate and inflation environment has caused a dip in our bottom line,” he adds.
Chew expects the current FY2023 to be a difficult one because the weakness in industrial production, persistent high inflation environment and economic uncertainty.
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“We will continue building on our strong foundations of a diversified geographic and product base, as well as capabilities in providing value-added solutions to a global customer base, to capitalise on opportunities when business conditions improve,” he adds.
Megachem shares last traded at 55 cents.
