(q) Trade and other payables Total trade payables decreased by S$0.3 million or 5.2% from S$6.3 million as at 31 December 2024 to S$6.0 million as at 31 December 2025. Turnover days decreased marginally to 26 days in FY 2025 as compared to 27 days in FY 2024. Other payables in aggregate consisting of accrued operating expenses, advance payments from customer and sundry payables decreased by S$1.0 million from S$8.6 million as at 31 December 2024 to S$7.6 million as at 31 December 2025. The decrease was mainly due to lower accrued operating expenses of S$1.8 million offset by higher sundry creditors of S$0.9 million. (r) Financial liabilities – lease liabilities The carrying value of lease liabilities decreased marginally from S$3.1 million as at 31 December 2024 to S$3.0 million as at 31 December 2025. Additional lease liabilities recognised of S$0.3 million and accretion of interest of S$0.2 million were offset by repayment of lease liabilities of S$0.6 million in FY 2025. (s) Borrowings Total borrowings increased by S$9.5 million or 37.5% from S$25.2 million as at 31 December 2024 to S$34.7 million as at 31 December 2025. This increase was mainly due to proceeds from long term and short term bank loans, which were used to finance the reconstruction of the warehouse, offset by repayment of bills payables. In line with higher total borrowings, our gearing ratio and net gearing ratio increased from 0.43 times and 0.16 times as at 31 December 2024 to 0.57 times and 0.34 times as at 31 December 2025 respectively. (t) Net asset per share attributable to equity holders of the Company Net asset value per share increased from 43.92 cents as at 31 December 2024 to 46.00 cents as at 31 December 2025 primarily due to comprehensive income recorded for equity holders of S$4.1 million offset by dividend payment of S$1.3 million in FY 2025. CASHFLOW REVIEW Positive cash flow from operating activities of S$5.7 million was generated in FY 2025 due to profitable operation and a reduction in inventories. Other major cash inflows under investing activities consist of dividend received from associate of S$0.5 million. Positive cashflow enable us to repay trade borrowings and bank interests of S$1.3 million each and to pay dividends of S$1.5 million. The progress payment of about S$13.5 million for the reconstruction of the warehouse came from S$7.0 million long term bank loans, short term bank loans and internal funds. As such, overall cash and cash equivalents decreased by S$1.3 million from S$15.3 million as at 31 December 2024 to S$14.0 million as at 31 December 2025. MEGACHEM LIMITED ANNUAL REPORT 2025 40 OPERATING AND FINANCIAL REVIEW
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