KUALA LUMPUR (Nov 14): Samchem Holdings Bhd achieved a 16% growth in revenue to RM317.3 million for the third quarter ended Sept 30, 2022 (3QFY2022), against RM272.8 million a year ago. 

However, the chemical product distributor’s net profit nearly halved to RM6.49 million for the quarter under review, compared with RM12.6 million for the previous corresponding quarter, according to a filing with the stock exchange. 

Earnings per share also dropped to 1.19 sen for 3QFY2022, from 2.32 sen a year ago.

Samchem attributed the lower profit to higher cost and loitering business activities faced by customers due to uncertainties.

For the nine-month period ended Sept 30, 2022 (9MFY2022), net profit also came in lower at RM44 million, versus RM50.8 million previously.

Nonetheless, higher sales volumes and average selling prices helped lift cumulative revenue by 8% to RM1.04 billion, from RM975 million for 9MFY2021.

Commenting on the earnings performance, chief executive officer Ng Thin Poh noted that Samchem faced several challenges, including interest hikes, inflationary pressures, higher input costs, logistics disruptions and China's zero-Covid policy in 3QFY2022.

“We view the setback in chemical demand as temporary, as the market adjusts to the new economic benchmark, rationalising product prices and normalising inventory levels,” Ng added.

“Despite the various challenges, we remained profitable and maintained strong financial resilience.”

Ng highlighted that Southeast Asia had become a more prominent manufacturing hub as an alternative to China.

The group expects its Pulau Indah and Vietnam expansion to be completed by end-2022, increasing its total warehousing capacity by 38% in Malaysia, and 58% in Vietnam.

Samchem closed unchanged at 70 sen a share on Monday (Nov 14).