Vicplas International has reported a profit after tax of $4.2 million for the FY2023 ended July 31, 52.1% lower than its profit after tax of $8.8 million in the year before.
The group’s revenue fell by 1.2% y-o-y to $129.2 million due to lower revenue from its medical devices segment. The segment’s revenue fell by 2.2% y-o-y to $90.6 million on the back of reduced orders from some customers as they rebalanced their post-pandemic inventory levels in response to the gradual recovery of the global logistics situation.
The group’s pipes and pipe fittings segment, however, saw revenue grow by 1.2% y-o-y to $38.7 million as construction activities in Singapore improved.
Other income fell by 24.7% y-o-y to $4.4 million mainly due to the decrease in income from tooling, mould and maintenance services.
For the FY2023, the group’s adjusted ebitda fell by 19.7% y-o-y to $14.7 million.
A final dividend of 0.45 cents per share was declared for the period, unchanged from the final dividend paid in the FY2022. This will be paid out on Jan 22, 2024.
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As at July 31, cash and cash equivalents stood at $8.6 million.
“In FY2023, the performance of our medical devices segment was affected by certain customers rightsizing their inventory levels post pandemic, higher operating costs due to rising supply chain and other input costs as well as costs from the first full 12 months of operations of our new Changzhou plant extension. We also invested in additional technical resources to meet customer demand and reprioritised sales and new business development activities as markets reopened post pandemic,” says Walter Tarca, group CEO of Vicplas.
“I see this current period of time as a challenging one after the last four years of rapid growth but we continue to commercialise new projects while investing in new capabilities and the development of a nearshore USA plant in Mexico in order to improve our collaboration and offerings to our global customer base,” he adds.
“While the medical devices segment faces these headwinds, our group’s performance has been supported by the continued growth in our pipes and pipe fittings segment with the recovery of Singapore’s construction sector, especially as new residential and mega projects come online. The pipes and pipe fittings segment will continue its focus on civil engineering projects and product expansion beyond the built environment, while containing costs and improving efficiency. As a group, we will be prudent and resourceful in operating in an uncertain macro environment with ongoing inflationary and interest rate pressures and remain very focused on managing our cost base while developing our capabilities and creating new business opportunities for future growth,” he continues.
Looking ahead, Vicplas expects its revenue growth to be “somewhat constrained” in the next reporting period for its medical devices segment while its pipes and pipe fittings segment is expected to continue recovering gradually. The group is also expecting to see increasing operating costs due to inflationary pressures and higher development and expansion costs.
“While the group remains cautiously optimistic, it is keeping a vigilant watch on the challenges that may arise from the uncertainties in the wider macro environment and the ongoing inflationary and interest rate pressures. As such, the group will continue to exercise prudent cost management, while developing new business opportunities, and strengthening its base for future growth,” says Vicplas in its Sept 28 statement.
As at 9.26am, shares in Vicplas are trading flat at 13.7 cents.
