AP Oil International Limited: 1H2025 Financial Results Analysis

AP Oil International Limited has released its condensed interim consolidated financial statements for the first half of 2025. In this article, we break down the Group’s financial performance, analyze key metrics, and discuss significant events and trends disclosed in the report. Our objective is to provide investors with a clear and actionable summary of the company’s financial health and outlook.

Key Financial Metrics & YoY Comparison

Performance Trends

• Revenue: Slight contraction of 1% YoY, primarily attributed to a decrease in the Manufacturing segment, partially offset by higher Trading segment sales.
• Gross Profit: Down 6% YoY, in line with lower revenue.
• EPS: Marginal decrease of 2% YoY, reflecting the lower net profit.
• Dividend: No interim dividend proposed for 1H2025, consistent with 1H2024. Historically, the company pays dividends after full-year results.
• Net Asset Value (NAV): Declined by 4%, mainly due to foreign currency translation losses as US dollar weakened against Singapore dollar.
• Cash Flows: Operating cash flows stable; investing cash flows improved due to the absence of large investments like the convertible promissory note seen in 1H2024.
• Cash Position: Cash and cash equivalents increased to S\$26.74m, up from S\$26.20m at year-end, despite adverse FX translation.

Exceptional Items & Related-Party Transactions

• Other Gains: Rose 111% YoY, mainly due to favorable FX adjustments as Singapore dollar strengthened.
• Other Losses: Improved, with a significant reduction in impairment and bad debts.
• Related-Party Transactions: Sales to joint ventures increased substantially (S\$1.86m vs S\$1.19m in 1H2024). One joint venture contributed higher profit.
• Major Customers: Two customers contributed more than 10% of total revenue, up from one in the prior year.
• Asset Revaluation: Decline in asset values was primarily FX-driven, not due to operational impairment.

Macroeconomic & Industry Commentary

The company notes severe global geopolitical instability as a continuing threat to international trade and business costs. Tariff unpredictability remains a challenge. Despite this, management expresses cautious optimism for the near and medium term, highlighting the group’s healthy balance sheet and resilience.

Chairman’s Statement

“The severe global geopolitical instability continues to disrupt international trade and fuel the costs of business. The extent of unilateral and retaliatory tariffs remains highly unpredictable. With a healthy balance sheet, we are cautiously optimistic of our near to medium-term businesses. We have demonstrated resilience and will continue to adjust our business strategies in accordance with the volatile business landscapes. We are fully prepared to explore opportunities emerging from the crisis and tackle challenges as they may arise.”

Tone: Cautiously positive, with an emphasis on resilience and adaptability.

Notable Corporate Actions & Events

• No share buybacks, dilution, or placements. The number of issued shares remained unchanged at 164,531,172.
• No new convertibles, options, or treasury shares issued.
• Subsidiary Incorporation: On July 2, 2025, AIM Chemical Industries Pte Ltd incorporated Singapore Life-Science Solutions and Supplements Pte. Ltd., a new wholly-owned subsidiary with S\$100,000 paid-up capital. This is a strategic exploration into life-sciences, but the impact is not expected to be material for FY2025.
• No major divestments, IPOs, fundraising, or asset sales.
• No significant subsequent events or legal disputes.

Conclusion & Investment Recommendations

Overall Financial Performance: The Group demonstrates stable operations with a resilient balance sheet, despite slight declines in revenue, gross profit, and EPS. FX volatility remains the main headwind, impacting asset values and reserves. Cash generation remains strong, and management continues to exercise prudent capital allocation. The outlook is neutral to cautiously positive, supported by the Chairman’s statement and absence of material adverse events.

Investor Recommendations

• If you currently hold the stock: Maintain your position. The Group remains fundamentally stable with decent liquidity and prudent management. While growth is muted, there is no sign of financial distress or excessive risk. Monitor for FX volatility and macro events, but the company is well-positioned to weather near-term challenges.
• If you do not hold the stock: Consider entry only if your investment strategy values stability and resilience over high growth. The stock is suitable for investors seeking exposure to specialty chemicals and lubricants with a Singapore focus, but do not expect rapid capital appreciation or high dividend yield in the short term.

Disclaimer: This analysis is based strictly on information disclosed in AP Oil International Limited’s 1H2025 financial statements. It does not constitute investment advice or take into account individual financial circumstances. Past performance is not indicative of future results. Investors should conduct their own due diligence or consult a licensed advisor before making any investment decisions.

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