$SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) ‘s FY2023 Annual Report brief summary:

# Financials:

- Rev decreased by 12% to RM 1.16 bil despite logging higher vol of chemicals sold.
- PBT dropped by 21% to RM 48.03 mil due to the downward trend of chemical prices from 2HFY2022, which continued throughout FY2023 in part due to weaker than expected demand from the reopening of China, as well as the slowdown in Europe.
- Geographical segment rev: Malaysia (48%), Vietnam (42%), Indonesia (7%) and Singapore (3%).
- Geographical segment PBT: Malaysia (61%), Vietnam (34%), Indonesia (1%) and Singapore (5%).
- Gearing ratio of 0.26.
- Dividend payout ratio of 42% was declared for FY2023.
- 1HFY2023 war particularly challenging due to extraordinary events occurring arbitrarily around the globe. For example, the war in the Middle East, weakening of MYR against USD, growing geo-political tensions in the South China Sea, the ongoing Russian-Ukraine war and China’s recovery was slower than anticipated.

# Updates:

- The newest plant in Pulau Indah Industrial Park, Port Klang was completed and commissioned in June 2023. Besides storage of drums, the new plant feature tanks for storage of bulk chemicals for distribution, with blending facilities of solvents to produce customized products for specific applications. The new plant will focus on chemical distribution and warehousing in the Central region, bulk-breaking with a QC lab to provide value-added services.
- The Group also acquired CKJ Logistics SB (completed by Q1 FY2024) via SC Udes SB. This move is to expand and strengthen their logistics infra.
- A 7-acre warehouse in Long An province, Vietnam has recently commenced operations. This warehouse is completed with storage tanks, bulk-breaking facilities and weighbridge to cater to the increasingly demanding market.

# Prospects:

- Despite all the uncertainties happening around the globe, the Group sees ample opportunities abound for them to solidify its position in the challenging and volatile market.
- Domestically, the implementation of 6% SST in the logistics sector as well as the expected reduction/removal of fuel subsidies will probably impact the domestic demand.