Chairman's Statement
(Extracted from Annual Report 2023)
Dear Shareholders,
Harnessing Technology To Forge New Paths
As we reflect on the financial year ended 31 December 2023, Mencast Holdings Ltd. has navigated through a period of strategic repositioning and operational challenges with resilience and adaptability.
The fiscal year 2023 marked significant improvements in our financial performance metrics:
- Revenue grew a robust 14% to $48.4 million in 2023, up from $42.3 million in 2022.
- Gross profit margin increased substantially from 23% in FY2022 to 29% in FY2023.
- Net cash generated from operating activities improved by $5.5 million, rising from $13.5 million in FY2022 to $19.0 million in FY2023.
- Borrowings decreased by $$22.8 million during the year.
These are a result of our steadfast commitment to the strategic priorities outlined in my previous communications, specifically:
1. Sustainability based value creation
Sustainability and customer focus are at the heart of our value proposition at Mencast. We are committed to aiding our customers in achieving their environmental objectives by promoting recycling, minimizing waste, and boosting efficiency.
2. Technology-led innovation
As customer demands evolve, so must we. Leveraging technology and innovation can bring life to new products and improve productivity while reducing carbon fooprint and waste. Technology and business model innovation can also accelerate the development and commercialisation of new engines of growth.
3. Additive manufacturing
In light of the labour constraints and high cost of business in Singapore, we have been leveraging our scientific and technical expertise to build new Intellectual Property driven solutions with strong scalability and growth potential.
An example of this is additive manufacturing ("AM"). This is a manufacturing process that heralds a paradigm shift to a more flexible, efficient and sustainable propeller manufacturing.
AM enables the creation of complex propeller designs previously unattainable with conventional manufacturing methods, unlocking enhanced propeller performance and efficiency. Production cycles can also be dramatically shortened by building propellers directly from digital models that allow rapid iteration. Additionally, there is a potential for customized and on-demand production capabilities without extensive retooling, minimizing inventory and logistics costs.
The automation and digitalisation integral to AM not only boost productivity by allowing for continuous machine operation with minimal oversight but also support sustainable manufacturing practices through the efficient use of materials and energy, including the option to use recycled materials. AM also offers new oppportunities to upskill our workforce to thrive in a digital manufacturing environment, aligning to our dedication to innovation, sustainability, and industry leadership.
Last but not least, the reduced material waste and enhanced production efficiency of AM lower carbon footprint, aligning with the sustainability goals of our customers.
4. Efficient and capital light model
Since the debt restructuring agreement in February 2019, the Group has adopted a less labour-intensive and capital-efficient business model. The Group's total debt has since reduced from a high of $189.8 million to $118.6 million as at 31 December 2023.
We will continue to monetise non-core assets to strengthen our balance sheet so that we can deploy capital to the highest yielding opportunities.
5. Appreciation
The last few years have been transformative for us as we streamlined our operations and executed our strategic plans. The results achieved are a testament to the relentless efforts and unwavering commitment of our management and staff.
I also wish to express my sincere appreciation to our shareholders, customers and business partners for their steadfast support. As we witness the culmination of a number of key initiatives, several board members will be stepping down as part of our board renewal process. I am immensely grateful for their counsel and commitment in establishing a strong platform for the future of the Group, especially in times of unprecedented challenges in the business environment.
As we move forward, Mencast remains dedicated to seizing the opportunities ahead with strategic focus, operational excellence, and unwavering commitment to delivering value to all our stakeholders.
Together, we aim to forge a sustainable future.
Sim Soon Ngee Glenndle
Executive Chairman and Chief Executive Officer