Nanofilm Technologies is expecting to see a decrease in revenue and patmi for the FY2022 ended Dec 31, 2022.
In its profit guidance statement on Feb 2, the group’s revenue for the FY2022 is expected to decline by 4% y-o-y. Its full-year patmi is expected to drop by 30% y-o-y.
The lower figures were mainly attributed to the “challenging operating environment” from macro headwinds, supply chain disruptions, and customers’ capital investment slowdown. The group had previously announced this on Nov 2 in its business update for the 9MFY2022.
In addition, the group said it had increased operating expenses during the year due to higher salaries on the back of higher headcount, as well as higher depreciation expenses due to capital investments made to position Nanofilm for future growth.
Operational disruptions faced by a key final assembly, test & pack (FATP) supplier to one of the group’s key customers in the 4QFY2022 due to Covid-19 also contributed to the y-o-y drop. According to Nanofilm, the disruptions “negatively impacted the group’s supply” for this customer’s key product.
Finally, softer demand from end consumers due to recessionary fears, as well as the spike in Covid-19 cases after China’s opening in December 2022 which interrupted the group’s operations, also contributed to the drop.
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The lower decrease in revenue is due to due to one-off costs of approximately $2.5 million related to Covid-19 restrictions, a net loss of approximately $1.6 million incurred by the company’s subsidiary, Sydrogen Energy Pte. Ltd., and fixed indirect costs that could not be reduced in tandem with the reduction in revenue.
That said, the group says it remains “focused” on achieving its revenue target of $500 million and earnings target of $100 million by the FY2025. This is backed by its “strong fundamentals and differentiated solutions rooted in its deep tech platform and operational excellence,” says the group.
The growth path towards its FY2025 target is expected to be non-linear as Nanofilm says it intends to deliver growth in three key end-markets - consumer, industrial, and new energy through multiple business models such as Equipment, Coating as a Service, Components, and Value Chain Integration.
It adds that it is “cautiously optimistic” that some of the operational risks and costs associated with the Covid-19 restrictions would not recur in FY2023.
The group will be releasing its results for the 2HFY2022 and FY2022 on Feb 21.
Shares in Nanofilm closed 6 cents higher or 4.17% up at $1.50 on Feb 2.
