HG Metal Manufacturing (BTG) H2 2023 earnings summary

Executive summary

• FY2023 net loss narrowed to S$1.77m from S$5.78m, with lower administrative costs and a S$0.7m one-time impairment related to Myanmar; continuing operations earned S$0.5m after tax.

• Sales volume rose 23% YoY, but lower selling prices and higher weighted-average material costs compressed gross profit and margin.

• Strategy shifted toward Singapore, with Myanmar operations discontinued, borrowings reduced and operational efficiency initiatives launched.

Financial highlights

• Total revenue, including continuing and discontinued operations, was S$152.14m in FY2023 versus S$158.37m in FY2022; continuing-operations revenue was S$149.8m, down 2% YoY.

• Continuing-operations gross profit fell 38% to S$12.8m from S$20.5m; gross margin was 8.5% versus 13.4%.

• Continuing-operations net profit after tax was S$0.5m versus S$4.9m; discontinued operations recorded a S$2.2m net loss, including a S$0.7m impairment.

• Operating cash flow improved to an inflow of S$22.3m from an outflow of S$14.9m; free cash flow was S$21.01m versus negative S$16.48m.

Outlook and guidance

• Cautious optimism for FY2024 operations and prospects, barring unforeseen circumstances and further significant impairments.

• Singapore construction demand is forecast at S$32bn–S$38bn in FY2024; the sector is expected to remain stable from 2025 to 2028.

• FY2024 priorities include focusing resources on Singapore, improving procurement and cash conversion, and continuing manufacturing workflow and efficiency initiatives.