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Nanofilm abandons FY2025 earnings and revenue target following profit warning for 1HFY2023

The Edge Singapore
·1-min read

The company expects revenue to drop by a third and incur a loss of $8 million

Nanofilm Technologies International warns that it will report a net loss of around $8 million when it reports its 1HFY2023 earnings on Aug 10.

It expects revenue to drop by 34% to $73 million.

Nanofilm has also abandoned an earlier target of achieving revenue of $500 million and earnings of $100 million come FY2025.

The company, the hottest IPO back in 2020, blames inflationary pressures and ongoing geopolitical tensions for causing a slower-than-expected recovery in end-consumer sentiment, which in turn led to lower demand for its coating services for consumer products.

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The company, which for now largely operates in China, attributes the weaker showing to a softer than anticipated post-reopening of China's economy in the six months to June 30.

In addition, it incurred higher costs from investments in new operating sites, specifically, Zigong and Huizhou.

According to Nanofilm, it has cut manpower and other operating costs.

For the coming 2HFY2023, Nanofilm guides for higher revenue versus 1HFY2023, and that it will remain profitable for the whole of FY2023.

However, the outlook is premised on factors including inflation not worsening, a downturn in key markets avoided, US-China ties to hold steady, consumer demand to not worsen, and no re-emergence of the pandemic which might affect supply chains, the company says.

"Nanofilm remains fully focused on delivering its long-term growth through the execution of its market expansion strategy," the company says.

Nanofilm closed unchanged on July 10 at $1.34, but down 2.9% year to date.

 

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