Matex International Limited: 1H2025 Financial Analysis & Investor Insights

Matex International Limited, a specialty chemical manufacturer focused on the textile industry, has released its condensed interim financial statements for the six months ended 30 June 2025. This update provides a comprehensive snapshot of the company’s recent financial performance, operational highlights, and key events likely to influence future prospects.

Key Financial Metrics & Performance Comparison

Historical Performance Trends & Exceptional Items

• Revenue: Dropped sharply by 27% YoY to S\$2.5 million, largely attributed to inflation, economic uncertainty, and intense price competition in the textile chemical sector.
• Gross Profit Margin: Marginal improvement from 20.64% to 22.07%, driven by more cost-effective sourcing, but absolute gross profit fell.
• Net Loss: Expanded by 52% YoY to S\$2.3 million, with losses attributable to both owners and non-controlling interests.
• Exceptional Income: Other income spiked 157% due to a one-off chromite ore trading transaction.
• Foreign Exchange Loss: A S\$0.4 million net forex loss was recognized versus a gain last year, impacting administrative expenses.
• No dividends declared or paid in current or prior periods.

Balance Sheet Review & Fund Flows

• Non-current assets fell to S\$1.7 million due to derecognition of right-of-use assets after terminating the Shanghai office lease, regular depreciation, and reduction in associate investment.
• Current assets rose to S\$15.2 million, mainly from inventory buildup and higher fixed deposit placements.
• Current liabilities were steady at S\$6.9 million, with a shift from trade payables to higher term loans due to new borrowings for working capital.
• Share capital increased from S\$25.8 million to S\$30.0 million after a private placement of 154 million shares in January 2025, raising S\$4.2 million in gross proceeds.
• Cash and equivalents at period-end were S\$10.1 million, up from S\$8.9 million at start of period, mainly reflecting cash inflows from financing activities.
• Working capital position improved from S\$6.2 million to S\$8.3 million.

Significant Corporate Events

• Share Placement and Dilution: January 2025 saw a placement of 154 million shares, increasing share capital and improving liquidity.
• Legal Disputes: Several requisitioned EGMs, boardroom changes, and legal injunctions (including a High Court-granted interim injunction) were disclosed, reflecting ongoing shareholder disputes and governance instability.
• Leadership Changes: Multiple board resignations and appointments in September 2025, including a new Chief Financial Officer and new Executive and Non-Executive Directors.
• Settlement Agreement: On 19 September 2025, a settlement agreement was reached among major shareholders, directors, and requisitionists, leading to withdrawal of legal actions and termination of contested share subscriptions.
• Asset sales and divestments: No material asset sales/divestments reported.
• Related-party transactions: No IPT mandate; no significant related-party transactions disclosed.

Use of Placement Proceeds

• Out of S\$3.9 million net proceeds from share placement, S\$1.2 million is earmarked for market expansion, S\$0.8 million for low-cost sourcing, S\$1.2 million for potential new businesses, and S\$0.8 million for working capital.

Industry & Macro Commentary

• Industry remains highly competitive, with a shift toward sustainability and eco-friendly solutions. Asia-Pacific is the dominant region, but cost pressures, regulatory changes, and geopolitical risks are persistent headwinds.
• Management expects ongoing elevated compliance and professional costs due to settlement agreements and recent legal events.

Chairman’s Statement

No direct Chairman’s Statement is presented in the interim report. However, recent board communications reflect a highly cautious and reactive tone, focusing on legal compliance, governance, and operational continuity following significant shareholder and management changes.

Conclusion & Investor Recommendations

Overall Financial Performance & Outlook:
Matex International’s 1H2025 results reflect a challenging operating environment, with significant revenue contraction, mounting losses, and ongoing corporate governance turmoil. While working capital and liquidity positions have improved following the share placement, underlying profitability remains under strain. The outlook is weak in the near term due to competitive pressures, economic uncertainty, and unresolved industry and governance issues.

• If you are currently holding Matex shares:
  • Exercise caution. The company faces operational and governance risks, as well as continued losses. Consider reducing exposure or closely monitoring for signs of business stabilization and improved profitability before committing further capital.
• If you are not holding Matex shares:
  • Adopt a wait-and-see approach. The risk profile remains elevated given recent boardroom instability, ongoing legal disputes, and weak financial performance. Only consider entry if there are clear signs of recovery, sustainable profitability, and governance normalization.

Disclaimer: This analysis is based solely on Matex International Limited’s published interim financial statements and does not constitute investment advice. Investors should consider their own financial circumstances and consult professional advisers before making any investment decisions.

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