Texchem stays optimistic despite FY23 challenges

KUALA LUMPUR: Despite expecting challenges for the rest of the financial year ending Dec 31, 2023 (FY23) Texchem Resources Bhd remains optimistic about its long-term outlook.

Executive chairman Tan Sri Fumihiko Konishi said elevated economic uncertainties continued to affect its performance stemming from inflationary pressures and rising interest rates.

“The polymer engineering division faced challenges arising from weak global demand within the hard disk drive and semiconductor industries. Nevertheless, we remain steadfast in scaling our business and capitalizing on opportunities in promising sectors like medical and life sciences.

“Conversely, the restaurant division encountered obstacles on the back of subdued consumer sentiment and escalating operating costs, which we are actively addressing. Additionally, the division was affected by Ramadhan on a quarter-on-quarter (QoQ) basis,” he said in a statement.

“All in all, while we expect the rest of FY23 to remain challenging, we remain optimistic on the long-term outlook of the group. We will continue to strengthen our recovery strategies in response to global market recoveries and leveraging on our diversified business along with the solid fundamentals across the core business divisions,” Fumihiko said.

Texchem posted a net loss of RM6.3mil in the second quarter ended June 30 compared with a net profit of RM6.7mil posted in the same quarter last year.

Its revenue fell 20.2% to RM240.4mil against RM301.5mil a year prior while loss per share stood at 5.32 sen versus earnings per share of 5.70 sen.

For the first six months, Texchem posted a net loss of RM6.5mil on revenue of RM508.9mil.

On financial position, Texchem’s net gearing has improved to 0.47 times as of 2Q23 compared to 0.58 times at the end of the immediate preceding quarter. This was boosted by a healthy generation of net operating cash flow of RM39.5mil in the quarter under review.