Multi-Chem Limited (SGX: Multi-Chem) FY2025 Results Analysis
Multi-Chem Limited, a Singapore-based distributor of IT products and provider of PCB services, has released its unaudited condensed interim financial statements for the six months and full year ended 31 December 2025. This article provides a detailed financial analysis structured for investors, highlighting key metrics, trends, dividend proposals, and management commentary.
Key Financial Metrics
| Metric |
2H 2025 |
1H 2025 |
2H 2024 |
YoY Change |
QoQ Change |
| Revenue |
\$352.95m |
\$301.0m |
\$341.15m |
+3.4% |
+17.2% |
| Gross Profit |
\$45.2m |
\$44.44m |
\$45.58m |
-0.8% |
+1.7% |
| Profit Before Tax (PBT) |
\$15.91m |
\$17.06m |
\$18.00m |
-11.6% |
-6.7% |
| Profit After Tax (PAT) |
\$12.23m |
\$14.21m |
\$14.40m |
-15.1% |
-14.1% |
| Earnings Per Share (EPS) |
13.57 cents |
15.78 cents |
15.98 cents |
-15.1% |
-14.0% |
| Dividend (per share) |
31.10 cents (FY) |
N/A |
25.30 cents (FY) |
+23.0% |
N/A |
Historical Performance Trends
- Annual Revenue: FY2025 revenue declined by 4.4% to \$653.9m from \$683.7m in FY2024, largely due to lower sales volume and USD depreciation.
- Profitability: Full-year profit after tax decreased by 14% YoY to \$26.44m (FY2024: \$30.82m), with EPS dropping to 29.35 cents from 34.21 cents.
- Dividends: Total dividend for FY2025 is proposed at 31.10 cents per share, up from 25.30 cents in FY2024. The final dividend, if approved, will be paid on 22 May 2026.
- Cash Position: Cash and cash equivalents increased to \$99.4m (FY2024: \$83.8m), with stronger cash generation from operations.
Dividends
The company proposed a final tax-exempt (one-tier) dividend of 20.00 cents per share for FY2025, in addition to the interim dividend of 11.10 cents, totaling 31.10 cents per share. This represents a 23% increase over the previous year’s total dividend of 25.30 cents per share.
Exceptional Items and Expenses
- Inventory Obsolescence: Allowance for inventory obsolescence and write-offs increased significantly to \$6.52m and \$1.95m, respectively (FY2024: \$1.28m and \$0.50m), reflecting tighter inventory management and possible product lifecycle changes.
- Loss Allowance: Loss allowance on trade receivables and contract assets rose to \$158,000 (FY2024: \$857,000), indicating higher credit risk or more conservative provisioning.
- PCB Division: Revenue dropped sharply due to closure of its factory and disposal of drilling machines, signaling a strategic exit from this segment.
Management Commentary and Outlook
“The IT business through Singapore and the regional offices achieved a year-on-year revenue increase of 3.6% in 2H2025 over the corresponding period in year 2024. On a full year basis, revenue in IT business decreased by 4.2% year on year. The decrease in revenue was mainly due to lower sales volume and the depreciation of United States dollar (“USD”) against Singapore dollar (“SGD”) which impacted on USD-denominated transactions in year 2025.
With the current inflation, geo-political conflicts and uncertainties arising from the tariffs imposed by the US, the Group is monitoring the impact on the global economy and will continue to be vigilant during this challenging time. The Group has a focused strategy of selling and promoting only the best-of-breed IT products. IT is still a critical requirement in businesses and security will continue to remain an integral part of the IT infrastructure. This should augur well for the Group’s business. For growth, the Group will focus on its best-of-breed products and will continue to look out for opportunities for regional expansion to deepen our regional operations.”
Tone: The Chairman’s statement is cautious but optimistic. Management acknowledges macroeconomic headwinds and currency risks but remains confident in the resilience of the IT segment and the long-term strategy.
Events and Risk Factors
- PCB Factory Closure: This has materially reduced PCB revenue and signals a strategic refocus on IT.
- Foreign Exchange Risk: The group is exposed to multiple currencies; USD depreciation impacted results.
- Credit Risk: Increased provisioning on trade receivables due to riskier credit environment.
- Macroeconomic Factors: Inflation, rising interest rates, and global geopolitical uncertainty are flagged as risks.
Conclusion and Investment Recommendations
Overall Assessment: Multi-Chem’s financial performance for FY2025 is mixed. While revenue and profit declined YoY, the company maintained strong cash generation, increased its dividend payout, and demonstrated resilience in the IT business amid macroeconomic and currency headwinds. The PCB segment has been decisively scaled back, reducing diversification but refocusing effort on its core IT business.
Recommendations
- If you currently hold Multi-Chem shares: Consider holding your position. The company’s robust dividend yield, healthy cash flow, and prudent risk management support shareholder value. However, monitor macroeconomic and currency risks as well as developments in the IT sector.
- If you do not currently hold Multi-Chem shares: The increased dividend and strong cash position may make Multi-Chem attractive for income-oriented investors. However, new entrants should be mindful of ongoing risks (macroeconomic, currency, and credit). Consider initiating a position only if you are comfortable with the company’s exposure to IT sector volatility and global uncertainties.
Disclaimer: This article is based solely on information from the company’s official financial report. It does not constitute financial advice. Investors should conduct their own due diligence and consult with a qualified advisor before making investment decisions.
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