AnAn International Limited: 1H 2025 Financial Review and Investment Outlook

AnAn International Limited, a Bermuda-incorporated investment holding company listed on the Singapore Exchange, has released its condensed interim consolidated financial statements for the six months ended 30 June 2025. The results, driven predominantly by its Dyneff Group fuel distribution business in France and Spain, reveal a marked turnaround in profitability and strong improvements in operational cash flow. Below is a detailed analysis tailored for investors and market observers.

Key Financial Metrics and YoY, QoQ Comparison

*QoQ proxy uses 2H 2024, inferred as the difference between FY2024 and 1H 2024, as quarterly breakdown is not provided.

Historical Performance & Trends

• Turnaround to Profit: The group posted a net profit of \$1.14M for 1H 2025, reversing a net loss of \$6.24M in 1H 2024. This improvement was mainly due to a higher gross profit margin (4.4% vs. 3.5%), increased sales volume, and more favorable supply terms for Dyneff Group.
• Cash Flow Surge: Operating cash flow rose sharply to \$73.83M (1H 2024: \$0.85M), as a result of reduced inventories and increased trade payables.
• Net Asset Value: NAV per share increased to 2.51 US cents (31 Dec 2024: 2.20 US cents).

Exceptional Earnings and Expenses

• Other Income: Jumped to \$3.81M (1H 2024: \$0.86M), mainly due to higher interest income and other collections from Dyneff customers.
• Impairment Losses: Net impairment loss on receivables decreased by 26% YoY, indicating improved receivable quality.
• Finance Expenses: Down 4% YoY, reflecting lower bank borrowings as working capital improved.

Related-Party Transactions & Fund Flows

• Expenses paid on behalf of AnAn Group (Singapore) Pte Ltd: \$804K
• Amount held on trust for AAG by a subsidiary: \$46.79M
• No share buybacks, placements, or dilution occurred during the period.

Dividend Policy

• No interim or final dividend declared for the period. The company states the decision is due to the need to preserve working capital for business activities.

Chairman’s Statement

“The Group’s revenue is mainly derived from Dyneff Group, who is a major independent energy distributor in the French and Spanish markets. The oil distribution industry in France and Spain is grappling with transformations driven by factors such as the global push towards renewable energy, market consolidation, shifting consumer preferences towards cleaner energy sources, and global economic dynamics.

Dyneff Group’s strategic plan involves maintaining its current market privileges in oil distribution with a stable customer base while diversifying its energy distribution activities to meet evolving customer demands in an increasingly diverse energy mix. In addition to pursuing organic growth, Dyneff Group is employing an acquisition strategy to explore growth opportunities, aligning with their goal of transforming from an oil distributor to an energy service provider. Despite uncertainties in the economic outlook, Dyneff Group remains cautious while continuing to focus on these strategies to ensure competitiveness and resilience in the evolving energy landscape over the next reporting period and the subsequent 12 months.”

The tone is cautiously optimistic, with a focus on transformation and resilience in response to industry disruption.

Outlook and Risks

• Industry Headwinds: The European oil distribution sector faces disruption from renewable energy trends and stricter environmental policies.
• Strategic Shifts: Dyneff is diversifying its energy mix and pursuing acquisitions to mitigate these risks.
• Borrowing & Guarantees: The group holds \$43.09M secured borrowings and has provided \$54.39M in supplier bank guarantees, representing ongoing credit and counterparty risks.
• No major legal, tax, or policy changes, or asset revaluations were disclosed for this period.

Conclusion & Investment Recommendation

AnAn International Limited’s 1H 2025 results mark a clear positive turnaround, with improved profitability, gross margins, and operating cash flows, primarily attributed to favorable market conditions and operational execution in its Dyneff Group subsidiary. The company is not paying dividends, prioritizing capital retention for growth and operational needs. The outlook is cautiously optimistic but recognizes industry risks related to the energy transition.

Recommendation for Current Shareholders

Hold – The company has returned to profitability and is strengthening its balance sheet and cash flow. However, uncertainties in the traditional fuel distribution sector and lack of dividends warrant a wait-and-see approach as the company executes its diversification strategy.

Recommendation for Potential Investors

Wait – While the turnaround is encouraging, the sector faces significant headwinds, and the absence of a dividend makes the stock less attractive to income investors. Prospective investors should monitor Dyneff’s diversification progress and overall market conditions before taking a position.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Please consult a licensed financial advisor before making any investment decisions. The recommendations are based solely on the information provided in the company’s 1H 2025 financial report.

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