Multi-Chem grew its revenue for 2HFY2022 by 3% to $315.1 million. However, because of lower margins, earnings dropped by 23% y-o-y to $10.3 million.
For the full year, earnings decreased by 20% to $20 million. Revenue was up 2% for FY2022 to $617 million.
Despite lower earnings versus FY2021, Multi-Chem plans to pay a much higher dividend of 17.7 cents for the whole of FY2022. In contrast, it paid 11.1 cents for the preceding FY2021.
The company attributes the lower margins to unfavourable forex movements that cost $2.6 million in forex losses, as well as allowance made for obsolete inventory.
Despite the name, Multi-Chem's core business now is the distribution of IT hardware and software. It is in electronics manufacturing too.
Multi-Chem warns that the near term outlook in the IT business is dependent on events such as those political or economic in nature and such events could affect business in certain markets.
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"With the current inflation peaking, rising interest rates and the Russian-Ukraine conflict, the global economic outlook remains uncertain which in turn will affect the group’s
business.
"However, IT is still a critical requirement in businesses and security will continue to remain an integral part of the IT infrastructure. This should augur well for the Group’s business," adds Multi-Chem.
To eke out growth, Multi-Chem will focus on so-called "best-of-breed" products and will continue to look out for opportunities for regional expansion.
Multi-Chem shares closed Feb at $1.70, up 0.59%.
