Abundance International Limited: 1H2025 Financial Analysis and Review

Abundance International Limited, a Singapore-listed company engaged primarily in chemical trading and print and paper management, has released its condensed interim financial statements for the six months ended 30 June 2025. The report details a challenging period, marked by decreased turnover and profitability, significant changes in asset composition, and ongoing adaptation to macroeconomic uncertainties.

Key Financial Metrics

*QoQ/2H2024 figures are inferred based on annualized or half-year data; precise quarterly breakdowns are not provided in the report.

Performance Overview

• Revenue: The Group’s revenue fell sharply by 27.8% YoY from \$357.7 million in 1H2024 to \$258.4 million in 1H2025, primarily due to a weaker global economic outlook, reduced customer demand, and a decline in average selling prices for chemical products.
• Net Profit: The company swung from a net profit of \$0.5 million in 1H2024 to a net loss of \$1.1 million in 1H2025, reflecting margin compression and lower sales.
• EPS: Earnings per share turned negative, from 0.04 US cents in 1H2024 to (0.09) US cents in 1H2025.
• Dividends: No interim dividend was declared for 1H2025 (unchanged YoY), as the board decided to defer any dividend decision given market uncertainties.
• Net Asset Value: NAV per share increased slightly from 2.89 US cents at end-2024 to 2.90 US cents as at 30 June 2025, reflecting relative stability in the Group’s equity base.

Segment and Geographical Analysis

• Chemical Trading: Revenue from chemicals, which forms the bulk of Group turnover, dropped by \$99.3 million (-27.8%) YoY. This decline was attributed to both volume and price pressures.
• Printing Related Services: Revenue decreased by 31.6% YoY, mainly due to lower customer orders and the cessation of paper slitting services.
• Geographically: The People’s Republic of China remains the largest market, followed by various Asian countries, all of which saw lower sales volumes or prices.

Exceptional Items and Notable Developments

• Asset Sale: The Group completed the disposal of its 12.74% stake in Shanghai Sunrise Polymer Material Co., Ltd. on 20 May 2025, realising net proceeds of US\$8.1 million. This marks a significant reduction in non-core assets and a focus on liquidity.
• No Revaluation Delays: Property, plant and equipment were revalued as required, with valuation driven by market comparables and currency movements. No impairment was recognised.
• Joint Venture Termination: The previously announced joint venture in China for commercial-scale FDME production was mutually terminated before full operationalisation, though the Group may revisit this investment in the future.
• Related Party Transactions: Purchases from Feixiang Japan Corporation (owned by a controlling shareholder) amounted to S\$747,000, conducted under a shareholder mandate.
• Cash Flow: The Group reported a net cash inflow of \$6.5 million for 1H2025, mainly due to the Sunrise disposal, offsetting negative operating cash flow and higher net outflows in financing activities.

Balance Sheet and Liquidity

• Inventories: Increased by \$10.2 million to \$22.7 million, reflecting purchases for upcoming orders and slower inventory turnover due to weak demand.
• Receivables: Trade receivables surged by \$24.8 million to \$42.7 million, largely from a rise in unmatured bill receivables and extended credit terms. Debtor turnover days rose to 21 (from 7 previously).
• Payables: Trade payables more than doubled to \$55.1 million, in part due to the timing of bill settlements.
• Borrowings: Short-term bank borrowings decreased to \$419,000 following the settlement of a temporary bridging loan. The Group remains lightly geared.
• Cash Position: Cash and bank balances increased to \$11.8 million, providing a buffer amid uncertain conditions.

Macroeconomic and Industry Commentary

The Chairman’s and management’s commentary is cautiously neutral-to-negative. They highlight the challenging macro environment — including weaker global demand and volatile chemical prices — as primary drivers of the current downturn. While the core chemical business is expected to remain stable over the next 12 months absent further external shocks, management is prioritising liquidity, prudent investment, and a flexible approach to new opportunities and exits. The board’s deferral of dividends until year-end further underscores their cautious stance.

Outlook

• Neutral-to-Weak Near-Term Outlook: The Group anticipates continued stability in its core chemical business with the support of stakeholders, yet remains wary of potential global economic recessions and market volatility.
• Investment Strategy: Management intends to remain opportunistic in investments, balancing long-term growth with liquidity needs.
• Print and Paper Business: Expected to remain small and non-core.

Conclusion

Abundance International Limited’s 1H2025 results reflect the pressures of a softening global economy on its core chemical trading business, leading to a sharp drop in revenue and a swing to losses. The Group’s decisive disposal of its Sunrise equity stake has strengthened its liquidity, but persistent margin compression, rising receivables, and a cautious management outlook suggest that near-term performance is likely to remain subdued. The absence of dividends further signals prudence. Overall, the Group’s financial performance and outlook appear neutral to weak, grounded in industry headwinds and management’s defensive posture.

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