Chemical Industries (Far East) reports fiscal 1H swung to net loss on Myanmar impairment

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Chemical Industries (Far East) reported Monday it swung to a fiscal first half net loss of S$2.66 million from a year-ago net profit of S$3.20 million, mainly due to an impairment loss of S$6.1 million for property, plant and equipment in Chemical Industries (Myanmar).

“The operations in Myanmar remain difficult as sales to our major customer remains uncertain. The group also faces currency volatility,” Chemical Industries (Far East) said in a filing to SGX. “The group will continue to monitor the evolving situation in Myanmar.”

Without the impairment, the group would have remained profitable for the six month period ended 30 September, the filing said.

Revenue for the six months ended 30 September was S$34.77 million, up 14.7 percent on-year on improved sales of chemical products in Singapore, the company said.

In its outlook, Chemical Industries (Far East) said the operating environment was likely to remain challenging as the Covid-19 pandemic has boosted raw material prices, and shipping and energy costs.

“Energy cost is expected to remain high in the coming months. As energy cost is a major component of our cost of sales, this would impact the group’s profitability,” the company said.

“Despite these challenges, the group continues to look at ways to increase its sales. The group expects sales to improve in the second quarter of FY 2023 from a new major pipeline customer,” the filing said.

In addition the company said it was starting energy and water reduction projects as part of its ESG initiatives.

Singapore-based Chemical Industries (Far East) is a manufacturer of chlorine, caustic soda and other chlor-alkaline products, supplying basic chemicals to the petro-chemical, pharmaceutical, electronics and water-treatment industries.