Post on 30-Sep-2020
MegaChem LimitedResults Presentation
Half Year Ended 30 June 2011
1H 2011 Industry Overview
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1H 11 Economy continued its recovery
Mar 2011
Japan Disaster : Supply Shortage & Price Increase
June 2011
Supply begin to normalise. Prices softened
Inspiring Performance
Financial Performance
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Financial Highlights
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Record Half-Yearly Sales
* Sales S$57.3 mil
Record Half-yearly Profit
* NPAT S$3.0 mil
Record Half-yearly Earnings per share
* EPS : 2.23 cents
P&L Highlights
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8.00.23.02.8NPAT
0.7% pts15.815.1ROE %
12.1%0.242.231.99EPS(cents)
26.30.120.580.46Share of Assoc Profit
-(1.4% pts)20.321.7Gross Profit Margin %
(18.2)(1.3)8.47.1Expenses
(87.4)(0.34)0.050.39Other Income
8.90.33.83.5NPBT
18.61.811.69.8Gross Profit
26.712.157.345.2Sales
Var %Var
Fav/(Unfav)
1H 111H 10S$’mil
P&L Highlights
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51.8%1.03.02.0NPAT
4.9% pts15.810.9ROE %
50.7%0.752.231.48EPS(cents)
(8.9)(0.06)0.580.64Share of Assoc Profit
-0.420.319.9Gross Profit Margin %
(5.7)(0.4)8.48.0Expenses
(42.7)(0.04)0.050.09Other Income
45.51.23.82.6NPBT
17.61.711.69.9Gross Profit
15.07.557.349.8Sales
Var %Var
Fav/(Unfav)
1H 112H 10S$’mil
Sales
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54.458.6 57.7
68.3
59.3 59.7
73.677.7
70.6
95.0
0
10
20
30
40
50
60
70
80
90
100
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
S$’mil
1H sales growth higher than CAGR over last 10 years.
CAGR : 6.4%
Sales
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S$’mil
34.536.8
31.9
38.7
45.249.8
57.3
40.939.1
0
10
20
30
40
50
60
1H 07 2H 07 1H 08 2H 08 1H 09 2H 09 1H 10 2H 10 1H 11
4 consecutive half-yearly sales growth
Record sales in 1H 11
Sales
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Consecutive Quarterly Sales Growth since 4Q 09
15.8
18.6
20.1
19.0
20.4 20.420.9
15.9
13.5
18.4
19.719.0
21.4
23.824.7
25.1
28.329.0
10
12
14
16
18
20
22
24
26
28
30
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
$'m
il
Sales by Geographic markets
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1H 11 vs 2H 10 : growth driven largely by ASEAN
1H 11 vs 1H 10 : growth across all regions except Europe
0
5
10
15
20
25
30
35
40
1H 10
2H 10
1H 11
1H 10 32.1 2.5 3.5 2.2 2.0 1.1 1.7
2H 10 32.0 2.4 6.1 3.2 2.5 1.1 2.4
1H 11 37.4 2.5 6.7 3.3 3.4 1.7 2.3
ASEAN Europe N Asia S Asia America Oceania ME
S$’mil
Sales by Industry
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Growth across all industry groupings
S$’mil
0
5
10
15
20
25
30
PCP APC SF Biotech Oil&Gas Lifestyle
1H 08
2H 08
1H 09
2H 09
1H 10
2H 10
1H 11
PCP:Performance Coatings & Polymer APC:Advanced Polymer Composites SF:Surface Technology
Gross Profit
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Lower Gross Profit margin in 2H 20 and 1H 11 due to change in market mix.
5
6
7
8
9
10
11
12
13
14
15
8%
10%
12%
14%
16%
18%
20%
22%
24%
G r o s s P r o f i t 7 . 9 7 . 8 6 . 8 8 . 5 9 . 8 9 . 9 1 1 . 6
G P M a r g i n 1 9 . 3 % 2 1 . 2 % 2 1 . 3 % 2 2 . 0 % 2 1 . 7 % 1 9 . 9 % 2 0 . 3 %
H 1 0 8 H 2 0 8 H 1 0 9 H 2 0 9 H 1 1 0 H 2 1 0 H 1 1 1
S$’mil
Expenses
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50.9%139411272Travelling & Transport
18.2%1,2998,4407,141Total Expenses
17.2%50343293Depreciation
20.9%138801663Rental
(21.0%)(56)211267Professional Fees
100%149149-FX *
14.9%6214,8004,179Staff Cost
Var %Var1H 111H 10S$’000
Total expenses increased S$1.3 mil or 18.2% to S$8.4 mil.
* FX gain of $125,000 in 1H 2010
Expenses
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Total expenses increased S$0.45 mil or 5.7% compared to 2H 10.
(6.6%)(29)411440Travelling & Transport
5.7%4528,4407,988Total Expenses
0.6%2343341Depreciation
4.3%33801768Rental
(39.2%)(136)211347Professional Fees
(59.7%)(221)149370FX
14.3%5984,8004,202Staff Cost
Var %Var1H 112H 10S$’000
Expenses
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0.2%1390.09%42Interest Expense
0.6%3430.6%293Depreciation
14.7%8,44015.8%7,140Total Expenses
0.6%
1.5%
9.2%
% of Sales
0.7%411272Travelling & Transport
1.4%801663Rental
8.4%4,8004,179Staff Cost
% of SalesH1 2011H1 2010S$’000
Expenses/Sales to cap at 15%
Other Income
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(100%)(125)-125FX Gain*
(87.4%)(338)49387Total Other Income
(96.7%)(47)249Grant Income
(91.3%)(126)12138Bad Debt Recovered
Var %Var1H 111H 10S$’000
Other Income decreased S$338,000 or 87.4%.
* 1H 2011 : FX Loss S$149,000
Other Income
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100.0%125-(125)FX Gain reversal*
(42.4%)(36)4985Total Other Income
(95.1%)(39)241Grant Income
(90.0%)(108)12120Bad Debt Recovered
Var %Var1H 112H 10S$’000
Other Income decreased S$36,000 or 42.4% compared to 2H 10.
* 2H 2010 : reversal of H1 2010 FX Gain S$125,000. Additional FX Loss S$370,000 recorded as FX Loss
Net Profit After Tax
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2.1
3.3 3.4
3.7
2.7
1.8
2.3 2.3
2.7
4.8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
$'mil
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
CAGR : 9.6%
Net Profit After Tax
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Record NPAT in 1H 11
1.4
1.0
1.6
0.8 0.8
1.9
2.8
2.0
3.0
0
0.5
1
1.5
2
2.5
3
S$mil
1H 07 2H 07 1H 08 2H 08 1H 09 2H 09 1H 10 2H 10 1H 11
Net Profit After Tax
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Highest Quarterly profit in 2Q 2011
14811562
801 784
622
927
123
658709
46
323
494
1015
873
14371381
1050955
0
200
400
600
800
1000
1200
1400
1600
1800
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
S$’000
Balance Sheet
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S$7.8 mil 11.9% of total
assets
S$25.5 mil38.9%
S$21.4 mil32.7%
S$2.8mil4.3%
S$4.5 mil6.9%
S$3.5 mil
5.3%
S$0.03 mil0.05%
� Cash
� Receivables
� Inventory
� Other Current Assets
� Investment in Assoc
� Property, Plant & Equipment
� Other LT Assets
S$10.9 mil 16.7% of total
Liabilities & equity
S$14.7 mil22.4%
S$39.0 mil59.5%
S$0.9 mil1.4%
� Payables
� Borrowings
� Shareholders Equity
� Other Liabilities
Assets Liabilities & Equity
Balance Sheet
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27.1
86
22.8
84
18.2
2.4
0.27
36.1
9.7
5.1
6.8
2010
28.1
78
24.8
84
21.4
2.2
0.39
39.0
14.7
5.9
7.8
June 2011
21.0Trade Receivables
Improved Credit Management106Trade Receivables T/O (days)
14.1Inventory
103Inventory T/O (days)
4.9Cash/share (cents)
25NTA/share (cents)
Sound liquidity2.8Current ratio (times)
Higher gearing supports growth0.2Gearing (times)
33.3Shareholders Equity
Higher borrowings 6.8Borrowings
6.6Cash
2009S$’mil
Cashflow
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(0.3)
1.7
(0.05)
(2.0)
1H 10
1.2
3.8
(0.7)
(2.0)
1H 11
Partial Payment for Factory purchase – (0.4)
Plant & Equipment – (0.3)
Cash used in investing activities
Net increase in cash
Dividends paid – (0.9)
Increase in borrowings – 5.0
Cash from financing activities
Changes in working capital :
Operating Profit before WC changes : 3.8
Increase in Receivables - (2.1)
Increase in Inventory - (3.2)
Increase in Payables – 0.2
Cash used in operating activities
S$’mil
Financial Summary
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P&L Summary
• Record Sales
• Lower Gross Profit Margin
• Higher operating expenses
• FX losses
• Higher Contribution from associate
• Higher Profit
Balance Sheet Summary
• Increasing working capital needs
• Higher borrowings
• Gearing higher
• Liquidity sound
Sustaining Momentum
Prospects
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+ normal chemical supply from Japan has gradually resumed
+ chemical prices likely to stabilise
+ on-going debt concerns in US and Europe may dampen business sentiment
+ investment in factory expansion
+ demand for Custom Blending and integrated services increasing
Cloudy economic outlook may have an impact on our growth in 2H 11
Outlook 2H 2011
Share Statistics
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Share Information (as at 21 July 2011)
Listing Date 17-Oct-2003
IPO Price 28 cents
Historical High 68 cents
Historical Low 13 cents
52 weeks High 22.0 cents
52 weeks Low 18.0 cents
Price 19.5 cents
No of Shares 133,300,000
Historical P/E 5.6x
Market Capitalisation $25.99 mil
NTA/share (cents) 28.1 cents
Share Price Performance
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Share Price Performance
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Dividend
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6.0%
34.6%
1.20
20
2010
2.7%
13.0%
0.30
22
1H 11
5.1%1.7%2.8%4.9%3.6%3.3%1.8%Dividend Yield (%)-Net
50.6%24.1%35.1%62.2%30.2%31.9%23.1%Dividend payout (%)-net
1.000.400.5950.810.5760.8640.56Dividend / share (cents) - net
19.523.521.516162631.5Price/sh(as at 31 Dec, 30 Jun)
2009200820072006200520042003
Investment Merits
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• Profitable track record since inception
• Resilient business model � tested through several crises
• Diversification � stability in business
• Global network and Manufacturing � Growth drivers for coming years
• Share Price/book value : 0.69 *
• P/E : 5.6 x *
(* Based on share price of 19.5 cents as at 21 July 2011)
For analyst reports on our company, you may refer to our website at http://www.megachem.com.sg
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This document has been prepared by the Company and the contents have been reviewed by the Company’s Sponsor, SAC Capital Private Limited, for compliance with the relevant rules of theSingapore Exchange Securities Trading Limited (“Exchange"). The Company’s Sponsor has not independently verified the contents of this document.
This document has not been examined or approved by the Exchange and the Exchange assumes noresponsibility for the contents of this document, including the correctness of any of the statements oropinions made or reports contained in this document.
The contact person for the Sponsor is Mr Bernard Lim (Tel : 65 6221 5590) at 79 Anson Road, #15-03, Singapore 079906.
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This presentation may contain forward-looking statements based on current assumptions and
forecasts. Various known and unknown risks, uncertainties and other factors could lead to
material differences between the actual future results, financial situation, development or
performance of the company and the estimates given here. The company assumes no liability
whatsoever to update these forward-looking statements or to conform them to future events or
developments. You are cautioned not to place undue reliance on these forward looking
statements.
Thank You
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