EnGro Corporation (S44) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 20.6% YoY to S$160.4m, while net loss widened to S$5.6m from S$0.8m; China market weakness and VC investment fair-value adjustments weighed on results.

• ICR demand strengthened in Singapore and Malaysia, while China GGBS selling prices fell sharply; specialty polymer remained profitable despite softer sales.

• Proposed FY2023 dividends total 5.0 cents/share, comprising 3.0 cents final and 2.0 cents special, subject to shareholder approval.

Financial highlights

• Revenue was S$160.356m versus S$132.985m in FY2022; gross profit was S$41.2m and cost of sales S$119.2m.

• Operating activities generated S$1.916m, down from S$8.538m; loss before tax was S$4.220m and net loss S$5.628m.

• Net finance costs narrowed to S$1.475m from S$5.506m, including FVTPL losses of S$3.113m versus S$11.588m in FY2022.

• Operating cash flow was S$9.629m versus S$5.159m used in FY2022; cash and cash equivalents increased to S$73.478m from S$66.723m.

Outlook and guidance

• Singapore construction demand is forecast at S$32bn–S$38bn for 2024; cement sales are expected to remain at FY2023 levels.

• Singapore GDP growth is projected at 1.0%–3.0% in 2024; global uncertainty and supply-chain disruption remain downside risks.

• China GGBS weakness is expected to persist into at least Q2 2024; priorities include lower costs, stronger products and strategic diversification.

• RPT production in Malaysia is planned to cease in Q3 2024 as operations relocate to Indonesia; the relocation is targeted for completion in FY2024.