Brook Crompton Holdings (AWC) H1 2024 earnings summary

Executive summary

• H1 2024 revenue fell 17.1% YoY to S$31.8m, mainly as UK and US sales eased after significant UK project deliveries in H1 2023; PBT declined 45% to S$2.2m.

• Gross margin improved on a mix shift toward higher-margin products, but lower sales and higher operating costs reduced EBITDA to S$2.6m from S$4.5m.

• Management expects a profitable H2 2024, citing an expected pickup in industrial activity and ability to support demand for renewable and energy-efficient solutions.

Financial highlights

• Revenue was S$31.763m, down 17.1% YoY; cost of sales fell 19.6% to S$22.683m and gross profit declined 10.1% to S$9.080m.

• Profit before tax was S$2.241m, down 45.0%; net income was S$1.737m, down 46.3%, while income tax expense fell 39.7% to S$504k.

• Operating expenses rose 11.9% to S$7.270m, including distribution and marketing costs up 17.3% to S$4.375m; net finance income increased to S$206k from S$72k.

• Basic and diluted EPS were both 4.92 Singapore cents, versus 9.13 cents in H1 2023.

• Net cash from operating activities was S$4.405m versus S$6.238m; cash and cash equivalents rose to S$22.538m at 30 June 2024.

Outlook and guidance

• Management expects a profitable H2 2024 as global industrial activity picks up; the positive effect of gradual interest-rate reductions is expected to be felt more in 2025.

• Chemical demand is expected to recover from a low base, while unwinding OPEC+ cuts is expected to support oil and gas demand.

• Inventory and the existing pipeline are positioned to support demand shifts toward renewable offerings and energy-efficient solutions.