SAMCHEM Holdings Bhd reported a 6.3% drop in net profit to RM5.06 million in the second quarter ended June 30, 2024 (2Q24), down from RM5.4 million the previous year, due to lower gross profit margins despite an 8% increase in revenue to RM298.43 million.

Integrated chemicals and lubricants distributor declared a second interim dividend of 0.5 sen per share.

For the first half of FY2024, net profit decreased by 6.5% year-on-year to RM11.15 million, despite a 12.2% revenue increase.

Samchem plans to capitalize on shifting supply chains and expand in Malaysia and Vietnam, while refining its product offerings to navigate market conditions.

In a statement on Thursday, Samchem executive chairman Ng Thin Poh noted that Q224 saw reduced activity due to festive holidays in Malaysia and Indonesia.

He observed cautious market sentiment amid China’s slow economic recovery and US recession fears, but manufacturing in key markets is stabilizing with increased chemical demand in construction and oil and gas.

To address current conditions, Samchem is refining its products and services, expanding into new industries, and enhancing its offerings to boost market share.

Ng sees the consolidation in the global petrochemical industry as beneficial, potentially supporting chemical prices and providing growth opportunities for distributors like Samchem, thanks to their expanded infrastructure in Malaysia and Vietnam

Samchem’s shares closed down 1 sen or 1.79% at 55 sen, giving the group a market capitalisation of RM299.2 million. — TMR