Our ability to operate across diverse markets, serve customers globally and leverage on our extensive network remains a key differentiator. MR SIDNEY CHEW CHOON TEE Managing Director DEAR VALUED SHAREHOLDERS, EXTERNAL ADVERSITIES The year unfolded against a backdrop of complex and demanding operating environment. The chemicals industry had to grapple with macroeconomic uncertainty, persistent geopolitical tensions, and structural challenges including supply chain recalibrations and an oversupply of chemicals that led to weaker chemical prices. These external headwinds inevitably weighed on customer demand and market sentiment. In spite of the external adversities, Megachem’s diversified business model, spanning a wide range of products and a broad customer base, continues to underpin our stability. Our ability to operate across diverse markets, serve customers regionally and globally, and leverage our extensive global network remains a key differentiator. Together, these strengths enable the Group to navigate volatility while reinforcing our competitive position. FINANCIAL PERFORMANCE: STABILITY AMIDST HEADWINDS For FY 2025, Megachem’s revenue stood at S$124.4 million, a 3.4% decrease compared to S$128.8 million in the previous financial year ended 31 December 2024 (“FY 2024”). The marginal decline in revenue was mainly attributed to lower sales across most markets due to softer demand amid ongoing macroeconomic and geopolitical uncertainties. Sales from Distribution and Manufacturing segments decreased by S$3.8 million or 3.0% and S$0.6 million or 16.5% respectively. Despite the lower sales, gross profit margin for FY 2025 improved to 25.6% as compared to 24.2% in FY 2024, mainly due to lower allowance for inventory impairment. As a result, gross profit increased by S$0.6 million or 1.8% year-on-year to S$31.8 million in FY 2025. Total operating expenses decreased by S$4.7 million or 14.4% yearon-year to S$27.8 million in FY 2025, largely due to the absence of expenses incurred from the fire incident in July 2023 such as the demolition and decontamination costs and waste disposal costs, which amounted to S$3.8 million in FY 2024. Pertaining to insurance compensation for the fire incident, there was none received in FY 2025 compared to S$9.3 million in FY 2024 which explains the lower other income in FY 2025. Overall, Megachem recorded a net profit after tax of S$3.9 million in FY 2025, 50.6% lower than S$7.9 million from a year ago. The decrease in profitability was mainly due to lower other income, offset by lower expenses and higher share of profits of associates. Adjusting for the impact of the fire incident, Megachem’s net profit after tax would have increased by S$1.0 million or 31.1% year-on-year. Earnings per share for FY 2025 came in at 2.88 cents as compared to 5.93 cents in FY2024. Net asset value per share increased to 46.0 cents as at 31 December 2025, up from 43.92 cents as at MEGACHEM LIMITED ANNUAL REPORT 2025 04 MANAGING DIRECTOR’S MESSAGE
RkJQdWJsaXNoZXIy NTM2MDQ5