31 December 2024. The Group’s balance sheet remains stable, with cash and bank balances of S$14.0 million as at 31 December 2025, as compared to S$16.0 million as at 31 December 2024. Net gearing ratio increased to 0.34 times as at 31 December 2025, in line with higher total borrowings which were used to finance the reconstruction of our new warehouse. Our continued focus on prudent capital management has allowed us to maintain a sound financial position, providing us with the stability needed to navigate uncertainties while positioning the Group for long-term growth. REBUILDING OUR WAREHOUSE: A STRATEGIC MILESTONE The reconstruction of our warehouse, which was damaged in the fire incident on 5 July 2023, reached a significant milestone during the year. Following the completion of the reconstruction, the Group is currently seeking the necessary regulatory clearance prior to applying for the Temporary Occupational Permit (TOP). Barring unforeseen circumstances, we expect the facility to be fully operational by end March 2026. The cost of construction is estimated to be in the region of S$18 million. This new warehouse supports our strategy of positioning ourselves as a one-stop solutions provider. It is purpose-built to handle multiple classes of chemicals, allowing us to serve the diverse needs of our customers more effectively. With its increased capacity, the facility will reduce our reliance on third-party storage and lower overall warehousing costs. It also underscores our strong commitment to safety, environmental responsibility and regulatory compliance. Over the long term, it is expected to strengthen our operational efficiency and enhance our competitiveness as well as provide Megachem a strategic advantage to meet the tailored needs of our customers. NAVIGATING AN EVOLVING LANDSCAPE Looking ahead, the global operating environment is expected to remain challenging amid heightened geopolitical risks, ongoing trade tensions and concerns over inflationary pressures as well as the fear of an AI bubble. A continued oversupply and ongoing trade complexities may temper near-term growth in the chemicals industry. Business sentiment remain cautious, and industry demand is expected to stay measured if prevailing market conditions persist. As our business is closely tied to global economic conditions and industry demand, the Group will continue to prioritise strong operational and financial discipline. We will continue to maintain prudent inventory oversight and cost controls, while remaining attentive to evolving market dynamics. Despite the current external adversities, there are tremendous opportunities for long-term growth. To capture these opportunities, we will continue to focus on building a resilient business model anchored by our customer and Asia-centric focus. These include strengthening our presence in key markets and broadening our product portfolio. We will continue to deepen our relationships with customers and suppliers to deliver reliable, value-added solutions tailored to their evolving needs. At the same time, we will also carefully seize opportunities to broaden our coverage across market segments to accelerate longterm growth. SUSTAINABLE CHEMISTRY: AN INTEGRAL COMMITMENT Sustainability is not merely a corporate initiative at Megachem, it is integral to how we conduct business. We continue to embed responsible practices across our operations. We work closely with our partners to support environmental sustainability and industry best practices, recognising that long-term business success is inseparable from responsible corporate citizenship. WORDS OF APPRECIATION I would like to convey my heartfelt appreciation to our Chairman and the Board of Directors for their stewardship, valued counsel and sound guidance throughout the year. My appreciation also goes out to our staff for their dedication and hard work, as well as our business partners for their continued trust and support. As we look ahead, I am confident that Megachem is equipped to pursue opportunities that lies ahead. Supported by our diversified product offerings, extensive global network, and the dedication of our people, we remain firmly committed to strengthening Megachem as a trusted specialty chemicals partner. SIDNEY CHEW CHOON TEE Managing Director Megachem Limited MEGACHEM LIMITED ANNUAL REPORT 2025 05 MANAGING DIRECTOR’S MESSAGE
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