Nanofilm Technologies (MZH) Q2 2024 earnings summary

Executive summary

• 1H2024 revenue grew 13% year-over-year to S$82.6 million, led by strong performance in AMBU (+20% YoY), NFBU (+50% YoY), and Sydrogen (+92% YoY), partially offset by a 56% YoY decline in IEBU.

• Adjusted EBITDA increased 61% YoY to S$16.7 million, with margin improving from 14.2% to 20.2%.

• PATMI/net loss narrowed by over 51% YoY to S$3.7 million, reflecting higher revenue, improved gross margins, and cost optimization.

• Acquisition of Axyntec in Europe and full ownership of NFT completed, supporting strategic expansion.

• Interim dividend of 0.33c (S$0.0033) per ordinary share declared.

Financial highlights

• Gross profit margin improved to 33.5% in 1H2024 from 32.0% in 1H2023, driven by operational gains in AMBU and NFBU.

• Administrative expenses decreased 3.3% YoY to S$21.2 million due to process optimization and lower staff costs.

• Selling & distribution costs rose 27.7% YoY to S$4.7 million, reflecting increased investment in sales capabilities.

• Basic and diluted loss per share improved to (0.57) cents from (1.17) cents year-over-year.

• Cash and cash equivalents stood at S$134 million as of 30 June 2024.

Outlook and guidance

• 2H2024 expected to see higher YoY revenue growth, especially in AMBU, with delayed projects ramping up and new customer wins.

• Group anticipates higher full-year revenues and profits for FY2024, barring major unforeseen events.

• Full-year capital expenditure expected to be lower, focusing on asset utilization and returns.

• Continued investment in Vietnam and Europe to support China+1 strategy and long-term growth.

• Continued focus on cost optimization, automation, and strategic procurement.