Nanofilm Technologies (MZH) H1 2023 earnings summary

Executive summary

• 1H2023 revenue fell 34.4% YoY to S$73.2m amid seasonality and weak consumer electronics demand; PATMI was a S$7.6m loss.

• Adjusted EBITDA of S$10.4m and operating cash flow of S$30.0m remained positive despite lower sales and costs tied to growth initiatives.

Financial highlights

• Revenue S$73.2m, down 34.4% YoY from S$111.3m; gross profit S$23.4m, down 53.1% from S$50.0m.

• Adjusted EBITDA S$10.4m, down 72.4% YoY from S$37.6m; PAT was a S$7.9m loss versus S$18.2m profit.

• PATMI was a S$7.6m loss versus S$18.8m profit in 1H2022, primarily due to lower sales and spending on strategic initiatives.

• Total cash and liquid assets stood at S$127.4m as of 30 June 2023.

Outlook and guidance

• 2H2023 revenue expected to exceed 1H2023, driven by seasonal peak production in Consumer; 2H2023 is not expected to be comparable with 2H2022.

• Full-year profitability depends on end-consumer demand for upcoming 3C product launches and customers not tightening capex further.

• Cost controls and pipeline contract execution will continue, balanced against peak-production needs and new business initiatives.

• Strong operating leverage is anticipated when markets recover and production volumes return.