Nanofilm Technologies MZH has recorded gross profits that were down 28% y-o-y for its 3QFY2023 ended Sept 30 amidst a challenging operating environment exacerbated by macro headwinds and the dampening of overall consumer sentiment.
While the group remained profitable during the quarter, gross profit was down for the period due to its inability to capitalise on economies of scale as a result of lower production volumes.
Revenue for the quarter also declined by 19% y-o-y to $55 million, but improved compared to Nanofilm’s 1HFY2023 revenue of $73 million.
On the back of a 76% q-o-q gross profit increase due to the improvement in operational performance with ongoing efforts in cost efficiency in 3QFY2023, gross profit margin climbed to over 40%, up from 32% in 1HFY2023.
Additionally, Nanofilm’s 3QFY2023 operating expenses saw a 10% y-o-y reduction, indicating its efforts to balance investments for longer term business expansion initiatives together with various cost control measures.
For the period, the group saw an uptick in operational activity driven by the seasonal peak period for the computer, communication and consumer (3C) segment, but this was still comparatively lower on a y-o-y basis.
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The 3QFY2023 recovery also saw an improvement in the group’s operational performance with higher gross profit margins achieved through improved cost control efforts.
However, given the macro uncertainties, customers continue to be cautious about their capital expenditure, impacting the group’s equipment sales.
Group CEO Gary Ho says: “Despite persistent macro headwinds continuing to dampen overall consumer sentiment with customers cautious on capital expenditure in 3QFY2023, we saw an improved business performance q-o-q helped by the seasonal 3C demand and ongoing cost optimisation efforts.”
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“Nearer term, we expect to see continued market volatility in 4QFY2023 and are continuing our efforts to balance cost with the necessary investment and market expansion activities to support future growth and innovation whilst remaining focused on our strategic goals to deliver sustainable long-term growth,” he adds.
Shares in Nanofilm closed 6.5 cents or 6.31% down at 96.5 cents on Nov 7.
