HG Metal Manufacturing (BTG) H1 2023 earnings summary

Executive summary

• H1 2023 revenue fell 19% YoY to S$66.3m; gross margin declined to 6.2% from 17.9%, and total net loss was S$3.7m.

• Continuing operations recorded a S$2.7m net loss, while discontinued operations added a S$1.0m net loss.

Financial highlights

• Gross profit fell 72% YoY to S$4.1m; lower selling prices and higher weighted-average inventory costs weighed on margins.

• Other operating income declined to S$1.0m from S$2.0m; administrative expenses decreased 32% to S$4.1m, while other operating expenses rose to S$2.8m.

• Finance costs increased 29% YoY to S$634k, primarily due to higher interest rates; continuing-operations PBT swung to a S$2.7m loss from S$7.6m profit.

• Net cash from operating activities was S$26.1m, mainly reflecting a S$34.7m inventory reduction; cash and cash equivalents were S$18.6m at 30 June 2023.

Outlook and guidance

• Expected a steady H2 2023 recovery in contractual offtake, supported by construction demand and a healthy order book.

• Plans to grow business volume, increase capacity utilisation and improve productivity while optimizing inventory to mitigate steel-price volatility.