Net Profit Growth: AsiaPhos Limited Financial Analysis Report – Q3 2024

Business Description

AsiaPhos Limited is a Singapore-based company engaged in the trading of phosphate chemical products and commodity products. Historically, the company was involved in the exploration, mining, production, and sale of phosphate rocks and chemicals. However, these activities have ceased, and the company’s current operations are focused on the trading of phosphate chemical products and fertilizers. Geographically, the company operates in Asia and Europe, with a small customer base in other regions.

Industry Position and Market Share

AsiaPhos Limited operates within the chemical trading industry, specifically focusing on phosphate chemicals and fertilizers. The company faces competition from other global and regional chemical traders. Given its recent shift from mining and production to trading, its exact market share within the industry is not specified in the report.

Revenue Streams and Customer Base

The company’s revenue streams include the trading of phosphate chemical products and fertilizers. Its major customers are located in Asia and Europe, with the top three customers contributing significantly to the revenue.

Financial Statement Analysis

Income Statement

For the nine months ended 30 September 2024, the Group reported a net profit after tax of \$1.96 million from continuing operations, compared to a loss of \$0.97 million in the same period in 2023. This turnaround is attributed to increased revenue from the trading of commodity products and the gain on the disposal of subsidiaries [[24]].

Balance Sheet

As of 30 September 2024, the Group’s current assets exceeded its current liabilities by \$3.94 million, a significant improvement from the net current liabilities of \$10.99 million as of 31 December 2023. This improvement is due to cash receipts from the disposal of the P4 Plant Assets and the acquisition of a new subsidiary [[31]].

Cash Flow Statement

The Group reported net cash outflows from operating activities mainly due to payments for legal costs and professional fees. However, there was a net cash inflow from investing activities due to proceeds from the disposal of the P4 Plant Assets [[32]].

Dividend

No dividend has been declared or recommended for the financial period ended 30 September 2024 as the company is not in a financial position to declare dividends [[34]].

Key Findings

• Net Profit Growth: The Group reported a net profit after tax of \$1.96 million for 9M2024 from continuing operations, compared to a loss of \$0.97 million in 9M2023.
• Improved Financial Position: The Group’s current assets exceeded its current liabilities by \$3.94 million as of 30 September 2024.
• Strategic Shift: The company has shifted its focus from mining and production to trading, enhancing its revenue streams through the acquisition of a new subsidiary in the fertilizer wholesale trade.
• Discontinued Operations: The company has disposed of its mining assets and the P4 Plant Assets, which has improved its cash position.

Investor Recommendations

For Current Investors

Hold: Given the significant improvement in financial performance and strategic shift towards more stable trading activities, it is recommended to hold the stock. The company’s improved financial position and net profit growth suggest potential for future profitability.

For Potential Investors

Buy: The recent strategic actions and improved financial performance present a compelling case for investment. The company’s focus on trading and the acquisition of a new subsidiary in the fertilizer market indicate potential for future growth and profitability.

Disclaimer

This report is based on the financial statements provided in the document and does not constitute financial advice. Investors are advised to perform their own due diligence or consult with a financial advisor before making any investment decisions.