AP Oil International Limited: FY2025 Financial Results Analysis

AP Oil International Limited, a Singapore-listed company engaged in manufacturing and trading lubricants and specialty chemicals, has released its Condensed Consolidated Financial Statements for the second half and full year ended 31 December 2025. Below, we provide a structured overview of key financial metrics, performance trends, dividend policy, and outlook, with actionable recommendations for investors.

Key Financial Metrics and Performance Comparison

Historical Performance Trends

• Full-year revenue increased 4% YoY to S\$56.8 million, driven by a 27% surge in Trading segment revenue, offsetting a 6% decline in Manufacturing segment revenue.
• Gross profit declined by 4% YoY, due to the shift toward lower-margin Trading activities.
• Profit after tax decreased 23% YoY to S\$1.58 million, reflecting lower gross margins and higher administrative expenses, partly due to staff welfare costs for the 50th anniversary.
• Net asset value per share fell 2% to 35.08 cents, mainly from exchange rate effects and depreciation.

Exceptional Earnings and Expenses

• Other gains dropped 22% YoY, primarily due to the absence of last year’s S\$330,000 compensation income and a one-off S\$506,000 donation to Nanyang Technological University in FY2024.
• Share of results from joint ventures rose sharply (+134% YoY), reflecting improved performance from AP Saigon Petro and AP Oil Singapore (Chongqing).

Dividend Policy

• A final dividend of 0.50 cents per share has been proposed, consistent with FY2024. The dividend is one-tier tax exempt and is subject to shareholder approval at the AGM. Payment is scheduled for 26 May 2026, with the record date as 7 May 2026.
• Total annual dividend for FY2025 is S\$823,000, unchanged from the prior year.

Cash Flow and Balance Sheet Highlights

• Operating cash flows increased slightly YoY to S\$2.56 million, mainly due to lower cash tied up in working capital.
• Investing cash flows improved, reflecting reduced capital expenditure.
• Cash and cash equivalents rose to S\$27.0 million, up S\$0.8 million over the year.
• Other reserves dropped 57%, mainly from foreign exchange translation effects.

Related Party Transactions

• Sales to joint ventures in FY2025 totaled S\$1.92 million, with licensing fee income of S\$11,000.

Macroeconomic and Industry Commentary

“The evolving landscapes of unilateral and retaliatory tariffs remain highly unpredictable. Global geopolitical instabilities continue to emerge. All these present ongoing challenges for global trade and economic growth.
However, with our healthy balance sheet, the Group remains cautiously optimistic on our medium-to-long-term prospects. Having demonstrated sustained resilience, we continue to navigate this volatile environment with agility – monitoring market shifts closely and prudently to manage risks while proactively identifying organic growth possibilities and exploring potential opportunities for strategic investments.”

Events and Outlook

• No major legal disputes or asset revaluations reported.
• No share buybacks, dilution, or new placements during the period.
• No forecast or prospect statement was disclosed.
• Business remains exposed to global trade volatility and currency risks, but maintains a conservative financial posture.

Conclusion & Recommendations

Overall, AP Oil International Limited’s FY2025 results reflect a resilient business navigating challenging conditions. Revenue growth was offset by lower gross margins and higher expenses, leading to a decline in net profit and EPS. The balance sheet remains strong, with substantial cash reserves and stable dividend payout. Management’s tone is cautiously optimistic, emphasizing prudent risk management and ongoing search for growth opportunities.

• If you are currently holding the stock: The steady dividend and robust balance sheet support continued holding for income-oriented investors. However, note the declining profit trend and margin pressures. Hold if you seek stability and modest yield; review position if your investment thesis relies on growth.
• If you are not holding the stock: The share may appeal to those seeking conservative exposure to the specialty chemicals sector with dividend stability. However, absence of earnings growth and margin compression suggest waiting for clearer signs of profit recovery or margin improvement before initiating a position.

Disclaimer: This analysis is based solely on the company’s disclosed financial statements and does not constitute financial advice. Investors should conduct their own due diligence and consider their risk tolerance and investment objectives before making decisions.

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