Chairman’s Message Dear Valued Shareholders, On behalf of the Board of Directors, I am pleased to present to you Megachem’s annual report for the financial year ended 31 December 2024 (“FY 2024”). FY 2024: A Year Of Recovery FY 2024 was a year marked by recovery, resilience, and renewed momentum for Megachem. Despite the challenging macroeconomic environment characterised by high interest rates and persistent geopolitical tensions, Megachem demonstrated our ability to adapt and thrive. Like the global economy, our business displayed remarkable resilience as we navigated through a period of normalisation following the tepid demand and destocking cycle of 2023 and the disruption of our business by the warehouse fire in the same year. We observed a steady pickup in customer orders, a reflection of renewed confidence. Megachem’s diversified business model, which spans a wide range of products and a broad customer base, has been a cornerstone of our resilience. Our ability to operate across diverse markets, serve global customers, and leverage our extensive supplier network has proven to be a key differentiator setting us apart internationally. Financial Performance Recovering For FY 2024, Megachem’s revenue stood at S$128.8 million, a 4.7% increase compared to the S$123.0 million in the previous financial year ended 31 December 2023 (“FY 2023”). The higher revenue was attributed to rising chemical demand and higher sales across key geographic markets including ASEAN and North Asia. Sales from the Distribution segment increased by S$5.6 million or 4.7% while the smaller manufacturing segment rose by S$0.2 million or 5.7%. In line with the higher sales, gross profit increased by S$8.7 million or 38.8% to S$31.2 million. Adjusting for the impact of a fire incident in July 2023, gross profit margin and gross profit would be 24.5% and S$31.5 million respectively. Total operating expenses (excluding finance cost) increased by S$1.9 million or 6.1% to S$32.5 million, mainly due to higher waste disposal costs, employee renumeration, net foreign exchange losses and warehouse storage charges. This was offset by lower demolition and decontamination costs, lower compensation claims and the absence of loss from property, plant and equipment destroyed in the fire written down. Overall, Megachem recorded a net profit after tax of S$7.9 million for FY 2024, as compared to a net loss after tax of S$5.8 million in FY 2023. Adjusting for the impact of the fire incident, Megachem would have recorded a net profit after tax of S$2.9 million, representing an increase of S$1.0 million or 53.5% year-on-year. Earnings per share for FY 2024 came in at 5.93 cents as compared to losses per share of 4.43 cents for FY 2023. Net asset value per share rose to 43.92 cents as at 31 December 2024, up from 37.48 cents as at 31 Our ability to operate across diverse markets, serve global customers, and leverage our extensive supplier network has proven to be a key differentiator setting us apart internationally. 4 ANNUAL REPORT 2024
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