Nanofilm, which became Singapore’s biggest IPO in 2020, posted a “record financial performance” for FY2020 ended December, according to its release on Feb 26.
The tech company saw earnings for the FY2020 increase 61.1% y-o-y to $57.6 million.
FY2020 revenue increased by 52.8% y-o-y to $218.3 million, as compared to $142.9 million a year ago, driven by its Advanced Materials and Nanofabrication Business Units.
Revenue from the Advanced Materials Business Units for FY2020 increased 66.4% y-o-y to $182.5 million, attributable to increased revenue contributions from 3C and Automotive product sub-segments.
Revenue for the Nanofabrication Business Units surged 90.3% y-o-y to $11.3 million. This was primarily due to new projects secured from a direct customer to produce Fresnel lenses for several models of smartphone of the end-customer.
Revenue for Industrial Equipment Business Units fell 10.1% y-o-y to $24.6 million, as the group says it remained selective on equipment sales to external customers. The majority of coating equipment manufactured during the year were retained within the Group to support the Advanced Materials BU.
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FY2020 gross profit rose 54.2% y-o-y to $119.8 million, while gross profit margin (GPM) increased 0.6 percentage points to 54.9% for FY2020, driven by the group’s operations leverage as a result of economies of scale arising from higher levels of production, increased efficiency of the group’s operations through automation and improved manufacturing work processes.
Profit after tax stood 68,1% y-o-y higher at $58.1 million, as the group benefitted from economies of scale and “boosted by operational excellence”.
Operationally, Nanofilm recorded a utilisation rate of 74% in the Advanced Materials Business Unit, which is “relatively stable” from 71% in FY2019. This comes after the addition of 73 coating equipment in the plant throughout FY2020 to a total of 176 coating equipment.
On the other hand, the Industrial Equipment Business Unit recorded a revenue of $24.6 million, a 10.1% decrease from $27.4 million in FY2019, as it “remains selective on equipment sales to external customers.”
The majority of coating equipment manufactured during the year were retained within the Group to support the Advanced Materials Business Unit.
As such, Nanofilm said the group continued to generate strong positive net operating cash flows amounting to $59 million for FY2020.
The balance sheet remained healthy in the period under review, with an increase in cash and bank balances to $227.4 million as at 31 December 2020.
It maintained a net cash balance of S$185.1 million as at 31 December 2020, after taking into consideration interest-bearing debt of S$42.3 million.
Earnings per share for FY2020 grew 52.2% to 10.6 cents from 7.0 cents in FY2019 and net asset value per share increased to 65.4 cents as at Dec 31, 2020, from 23.6 cents as at Dec 31, 2019.
As at end-December, cash and cash equivalents stood at $226.5 million.
While the group did not declare any dividends for the FY2020, it intends to recommend and distribute dividends of at least 20% of its net profit after tax excluding exceptional items for the FY2021.
Future outlook
Moving forward, Nanofilm said operations at the Group’s Shanghai Plant 2 will provide the company with an additional 66,406 square metres of gross built-up area to house new production facilities.
This will also increase the group’s total gross floor area across all of its production facilities to more than 110,000 square metres. The Shanghai Plant 2 has commenced operations in February 2021.
“Nanofilm continues to be well-positioned for growth opportunities in existing and recently established end-industries, underpinned by its deep-tech environmentally sustainable nanotechnology solutions as key catalysts in enabling its customers to achieve high value-add advancements in their end-products.” it writes in its outlook.
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The company added it intends to strengthen its value proposition as a provider of technology-based solutions through synergistic M&As or strategic partnerships, focusing on integration across the product value chain to drive sustainable growth.
For long term strategic objectives, Nanofilm continues to maximise its core technologies in mission critical applications in new end-markets that are in favourable secular growth trends, in line with its vision of integrating nanotechnology into the daily lives of end-consumers.
“Since 1999, with our technology ecosystem and value propositions, we have shown a strong track record in acquiring and retaining customers, including market leading blue-chip end-customers in multiple mission critical applications and products. Our relationship continues to strengthen over time as we are typically engaged in the early stage of our customers’ development and design process, to mass production and continuous product enhancement, providing our customers with value-added services using our proprietary differentiated nanotechnology solutions,” says CEO Lee Liang Huang.
“To maintain our technology leadership and stay ahead of competition, we will continue to invest and build on our three core competencies – our R&D innovation and product development, inhouse engineering and efficient production capabilities,” Lee adds.
Shares in Nanofilm closed at $4.64 at Feb 26, 18 cents lower and 3.73% down compared to the day before.
