Financials Reports

Full Year Results Financial Statement And Related Announcement

Condensed Interim Financial Statements For Fourth Quarter and Financal Year Ended 30 June 2025

Condensed Interim Consolidated Statement Of Profit Or Loss And Other Comprehensive Income For The Fourth Quarter And Financial Year Ended 30 June 2025

Condensed Interim Statements Of Financial Position

Review of Group Performance

Group Revenue

For the 12 months ended 30 June 2025 ("FY2025"), the Group's revenue increased by 12.6% year-on-year ("yoy") to S$65.2 million from S$57.9 million for FY2024. For the three months ended 30 June 2025 ("4QFY2025"), the Group's revenue increased by 12.0% yoy to S$16.7 million from S$14.9 million for 4QFY2024, representing four quarters of yoy topline growth. On a quarter-on-quarter ("qoq") basis, the Group's revenue for 4QFY2025 increased 4.7% to S$16.7 million from S$16.0 million for 3QFY2025, due to stronger results from the Group's consumable tools sales.

Revenue breakdown by Segment

For FY2025, sales from consumable tools increased by 5.7% yoy to S$50.4 million, while sales from Wafer Fabrication Equipment ("WFE") increased by 45.5% yoy to S$14.8 million.

For 4QFY2025, sales from the consumable tools segment increased by 6.5% yoy to S$13.1 million from S$12.3 million for 4QFY2024. On a qoq basis, sales from consumable tools increased 9.6% to S$13.1 million for 4QFY2025 from S$11.9 million for 3QFY2025.

Consumable tools remained the Group's core business segment, accounting for 78.1% of the Group's revenue for 4QFY2025, and 77.3% of the Group's revenue for FY2025.

Sales from the Group's WFE segment increased by 37.4% yoy to S$3.7 million from S$2.7 million for 4QFY2024, reflecting a continuous rebound in orders following the Group's efforts to recalibrate its engineering and product focus to develop a more compelling, competitive and higher-value product mix. Consequently, WFE contributed 21.9% to the Group's revenue for 4QFY2025 and 22.7% for FY2025.

The WFE segment primarily serves customers based in USA, Singapore and Malaysia.

By geographical segments, sales from China increased by 1.5% yoy to S$20.4 million yoy and remained as the Group's largest geographical market, contributing 31.3% to the Group's revenue for FY2025. Sales from the USA also grew 25.2% yoy to S$14.6 million for FY2025, driven by targeted engineering focus key WFE products areas that boosted differentiation and margins.

In Malaysia, the Group registered an increase in sales of 28.5% yoy to S$12.1 million for FY2025 constituting 18.6% of Group revenue. Sales in Singapore increased 15.1% yoy to S$5.7 million, representing 8.8% of the Group's revenue for FY2025.

Sales in the Philippines were stable at S$3.2 million for FY2025, whereas sales in Taiwan increased by 13.7% yoy to S$3.9 million for FY2025, supported by the Group's effort on advanced packaging applications with customers in Taiwan.

Gross Profit (GP) Margin

The Group's gross profit grew 18.5% yoy to S$32.2 million for FY2025, with gross profit margin improving to 49.4% for FY2025 from 47.0% for FY2024.

The Group's gross profit increased by 18.2% yoy from S$6.9 million for 4QFY2024 to S$8.2 million for 4QFY2025, with gross profit margin improving to 49.0% for 4QFY2025 from 46.5% for 4QFY2024. Gross profit grew by 1.7% qoq, rising from S$8.0 million for 3QFY2025 to S$8.2 million. However, the gross profit margin experienced a modest decrease, falling to 49.0% compared to 50.5% for 3QFY2025.

The overall improvement in gross profit margin for FY2025 relative to FY2024 demonstrates the Group's ongoing commitment to Operational Excellence, which remains a key component of the Five-Star Factory initiative.

Other income, Distribution Cost, Administrative Expenses, Other Operating Expenses and Net Finance Costs

For FY2025, the Group's other income decreased by 21.0% yoy to S$326.7k (FY2024: S$413.6k) due to discontinued rental income from October 2024.

Distribution expenses rose 4.7% yoy to S$3.0 million for FY2025 (FY2024: S$2.9 million) primarily attributable to salary adjustments.

Administrative expenses rose by 4.4% yoy to S$9.5 million for FY2025 (FY2024: S$9.1 million), primarily due to increased bonus payments associated with improved performance. Other operating expenses declined by 8.1% yoy to S$3.4 million, reflecting a reduction in headcount at MMUS.

Finance expense decreased by 14.2% yoy to S$442.6k for FY2025 (FY2024: S$516.0k), mainly due to lower interest expense on lease liabilities with most of the leases nearing the end of their respective terms.

In aggregate, the Group's administrative, distribution and other operating expenses (net of other income) as a percentage of revenue, decreased to 24.3% or S$15.9 million for FY2025 as compared to 27.0% in the same period a year ago. The Group remains committed towards prudent cost management amid evolving business conditions. By continuously evaluating its cost structure, the Group seeks to optimise efficiency, enhance operational effectiveness, and maintain a strong foundation for sustainable growth.

Profit before Tax and Net Profit

As a result of the above, the Group's profit before tax increased by 41.8% to S$16.4 million for FY2025 from S$11.5 million for FY2024.

Income tax expenses increased by 13.2% to S$4.0 million in FY2025, from S$3.5 million in FY2024. The Group's effective tax rate declined to 24.2% in FY2025, compared with 30.3% in the prior year. While MMUS experienced a rebound in orders and improved profitability from the start of FY2025, the lower effective tax rate was principally due to the application of previously recorded unutilised tax losses, which offset chargeable income and mitigated the tax impact of the stronger financial performance.

After deducting income tax expenses, the Group's net profit increased by 54.2% to S$12.4 million from S$8.0 million for FY2024. Net profit margin grew to 19.0% for FY2025 as compared to 13.9% for FY2024. Correspondingly, the Group's earnings per share increased by 54.3% yoy to 8.92 cents for FY2025.

Other comprehensive income

Foreign currency translation differences from foreign operations resulted in a loss of S$911.6k in FY2025 (FY2024: gain of S$93k). The variance was principally attributable to the depreciation of the US dollar and Chinese yuan against the Singapore dollar by 6.1% and 6.5%, respectively. For 4QFY2025, translation differences resulted in a loss of S$1.0 million (4QFY2024: gain of S$65k), reflecting the depreciation of the US dollar and Chinese yuan against the Singapore dollar by 5.0% and 4.8%, respectively.

Dividend Payment

The Group has a formal dividend policy to distribute 40% or more of its after-tax annual earnings, after taking into consideration financial performance, projected cash flow and capital requirements for business growth and general economic conditions among other relevant factors.

The Board of Directors is recommending a final dividend of 3.0 cents per share (one tier tax-exempt) in respect of FY2025. If approved by shareholders at the Annual General Meeting to be held on 30 October 2025, the dividend will be paid on 18 November 2025.

Together with the interim dividend of 3.0 cents per share (one tier tax-exempt) paid on 18 February 2025, the Group's total dividend for FY2025 would be 6.0 cents per share (one tier tax-exempt). The total payout for FY2025 will amount to S$8.3 million, representing a dividend payout ratio of 67.3% for FY2025.

Balance Sheet

The Group remains in a resilient financial position. As at 30 June 2025, it had a balance sheet with total assets of S$60.8 million, shareholders' equity of S$49.2 million, cash and cash equivalents of S$23.3 million and no bank borrowings.

Long Term Assets

As at 30 June 2025, non-current assets decreased to S$21.2 million as compared to S$24.8 million as at 30 June 2024 due mainly to the depreciation charge of property, plant and equipment.

Trade Receivables

Trade receivables as at 30 June 2025 increased to S$12.5 million from S$10.8 million as at 30 June 2024. Of this, S$2k was outstanding for 90 days or more (S$3.7k at 30 June 2024). There were no trade receivables written off during the year (FY2024: S$3.9k).

Trade & Other Payables

As at 30 June 2025, trade payables totalled S$797k (30 June 2024: S$924k) with only S$1.1k (30 June 2024: S$13.1k) outstanding for 30 days or more.

Non-trade payables and accrued expenses totalled S$0.6 million (30 June 2024: S$0.8 million) and S$4.3 million (30 June 2024: S$3.7 million) respectively as at 30 June 2025.

Long term liabilities

As at 30 June 2025 and 30 June 2024, the deferred tax liabilities were both S$1.4 million.

Inventory

The Group actively manages its inventory to prevent over-stocking and reduce write-offs, as part of its ongoing commitment to operational excellence under the Five-Star Factory initiative. As at 30 June 2025, inventory amounted to S$3.1 million, representing 4.8% of sales for FY2025 (30 June 2024: S$3.9 million, or 6.7% of sales). Inventory write-offs totalled S$166k for FY2025, compared to S$214k for FY2024.

Capital Expenditure

Following significant capital expenditure for growth in recent years (FY2021: S$6.8 million; FY2022: S$4.9 million; FY2023: S$4.0 million; FY2024: S$2.0 million), the Group is now well positioned to optimise capital allocation. In line with its disciplined approach to capital management, the Group continues to invest strategically in growth-related capital expenditure, responding to prevailing market conditions and business requirements.

The Group's capital expenditure for FY2025 amounted to approximately S$1.2 million. This mainly comprised mainly S$741k of investments in new machines and accessories, and S$365k for the purchase of computers and IT software for the Group's five factories worldwide.

Cash Flow Analysis

The Group generated net cash from operations of S$18.3 million for FY2025 (S$14.6 million for FY2024). After deducting net cash used in investing activities of S$1.2 million and net cash used in financing activities of S$9.9 million, which was mainly for the payment of dividends in respect of FY2024 and 1HFY2025, the Group reported a cash balance of S$23.3 million including S$0.2 million held as security deposits for FY2025.

Commentary On Current Year Prospects

Sector performance and outlook

Despite macroeconomic and geopolitical volatilities, the global semiconductor industry continued to see sales growth in 4QFY2025, driven by robust demand for applications in high-performance computing, data centers, and Artificial Intelligence ("AI"). According to the Semiconductor Industry Association ("SIA"), global semiconductor sales rose by 7.8% qoq and nearly 20% yoy to US$179.7 billion between April to June 2025.

In line with this positive trend, the Group delivered another strong business performance for 4QFY2025, with sales from its consumable tools and WFE segments up by 6.5% yoy to S$13.1 million and by 37.4% yoy to S$3.7 million respectively. On a full-year basis, Group revenue increased by 12.6% yoy to S$65.2 million.

Looking ahead, the World Semiconductor Statistics* ("WSTS") expects the global semiconductor market to grow by 9.9% yoy to US$800 billion in 2026.

The Group is encouraged by its strong performance in FY2025, as well as the industry's growth prospects in FY2026. As it heads into FY2026, the Group expects the localisation of supply chains to remain a key growth driver. This includes the WFE segment, where the Group sees US players actively building out domestic advanced packaging capabilities.

The Group is uniquely positioned to seize these emerging opportunities with its decentralised structure and expertise in semiconductor solutions. Nevertheless, the Group remains cognisant of risks arising from macroeconomic factors outside management's direct control. These encompass the effects of reciprocal tariffs in operating markets and the potential imposition of sector-specific tariffs by the Trump administration. Accordingly, the Group continues to closely monitor and assess their implications for its operations.

*Note: WSTS forecasts global semiconductor sales, and while the Group's manufacturing of high precision tools and parts is part of the semiconductor industry's supply chain, the Group's performance in specific business segments during any particular time period may not always correlate with the general sales trend of the semiconductor industry.

Key Initiatives for FY2026
Looking ahead, the Group is committed to sustaining the positive momentum seen in FY2025, with several initiatives in place to further strengthen its proposition and resilience across the value chain and deliver sustainable long-term value for its shareholders. These include:

1. Advancing the Five-Star Factory initiative
   The Five-Star Factory initiative aims to drive excellence across five key areas - people, customer focus, operations, innovation, and workplace safety and efficiency - to strengthen the core foundations of the Group's business and futureproof it for sustainable long-term growth. Since its launch in FY2024, the initiative has delivered meaningful progress, supporting the Group's transition from traditional packaging to advanced packaging technologies. Emphasising process excellence is central to the Group's objective of becoming a Next Generation Supplier capable of meeting the industry's increasingly stringent standards for both consumable chip assembly tools and WFE components. This focus has also allowed the Group to remain agile and responsive to evolving customer needs in the face of ongoing external uncertainties.
   
   Heading into FY2026, the Group remains focused on advancing the five pillars of excellence, with the aim of solidifying its foundations for sustainable long-term growth:
   • Fast, Effective & Local Support to Our Global Customers: Strengthening the Group's decentralised structure and customer interactions to enable their success and the advancement of the semiconductor industry.
     • The Group is continuing to closely engage customers to identify new opportunities to support higher-value problems across the value chain.
     • The Group continued to demonstrate strong responsiveness to customer requests, reducing lead times in many instances to less than seven days.
   • Operational Excellence: Leveraging lean engineering and management principles, data and automation to develop fast, flawless and cost-effective manufacturing.
     • The Group continued to minimise inventory overstocking with inventory of S$3.1 million as at 30 June 2025 (30 June 2024: S$3.9 million), representing 4.8% of annualised sales (30 June 2024: 6.7%). Inventory written off for FY2025 totalled S$166k, compared to S$214k for FY2024.
     • During the quarter, the Group continued to make good improvements in its elastomer manufacturing process, which represents about 29.6% of the Group's revenue, in terms of both cost, lead time and yield.
   • Innovation Excellence: Strengthening a culture that promotes fresh thinking and ingenuity that drives product and process innovations and improvements, enables new manufacturing capability, and encourages the adoption of new technologies and methodologies.
     • The Group continues to engage its R&D and manufacturing teams to improve its manufacturing capabilities to support higher-value orders.
     • As part of the Group's ongoing efforts to drive Innovation Excellence, the Group is also continuing to focus and build its capabilities in leading-edge technology applications, including the development of elastomer pick up tools used to package advanced chips like High Bandwidth Memory (HBM).
     • The Group is also exploring manufacturing software that leverages AI and scientific-based approaches to optimise material removal during the machining process for greater efficiency.
   • High-Performance Teams: Building a High Performance Team of talented people with the right skills in the right positions, upskilling the Group's workforce through training programmes, and aligning incentive systems with measurements of progress and performance.
     • As part of a carefully planned transition to ensure continuity and strengthen the foundations for long-term growth, the Board of Directors appointed Mr. Kyle Borch as Chief Executive Officer ("CEO") with effect from 1 July 2025.
     • He succeeded Mr. Christopher Borch, who will continue in his capacity as Executive Chairman.
     • Additionally, the Group has onboarded the Group's first Vice President of Human Resources ("HR") to help oversee and develop the Group's talent programmes, which will strengthen the long-term foundations for building High Performance Teams.
   • Workplace Efficiency and Safety: Implementing "8S" practices by all personnel resulting in organised, productive, clean, safe and environmentally responsible operations.
     • As of FY2025, all the Group's facilities have improved their internal Five-Star ratings yoy, with two facilities scoring Five-Star ratings.
   
   
2. Maintaining profitability at MMUS
   In 2HFY2024, the Group completed a restructuring plan at MMUS, where it strategically recalibrated the plant's engineering and product focus to create a more compelling, competitive and higher-value product mix of process-critical parts for the WFE industry. The Group also implemented a host of initiatives to optimise costs and improve efficiency as part of its overarching focus on enhancing Operational Excellence and accelerating innovation across its facilities.
   
   As a result of these efforts, operating performance at MMUS improved significantly yoy for FY2025 with a sharpened product mix and improved margins. Consequently, the Group recorded a full year profit at MMUS of S$1.2 million for FY2025, compared to a loss of S$2.2 million for FY2024. The Group is encouraged by the positive outcomes yielded in FY2025 and remains focused on sustaining this momentum amidst ongoing trade volatility and industry uncertainty.
   
   
3. Prioritising disciplined capital management and good governance
   The Group continues to exercise disciplined capital management and uphold good governance to deliver sustainable long-term shareholder returns. For FY2025, the Group generated net cash from operations of S$18.3 million. After deducting net cash used in investing activities of S$1.2 million and net cash used in financing activities of S$9.9 million, which was mainly for the payment of dividends in respect of FY2024 and 1HFY2025, the Group ended FY2025 with S$23.3 million in cash and no bank borrowings.
   
   To support sustained business and earnings growth, the Group is investing strategically in capital expenditure to enhance its manufacturing capabilities and productivity. These investments include equipment to support greater precision work, automation, and enhanced productivity.
   
   The Board has recommended a final dividend of 3.0 cents per share for FY2025. If approved by shareholders at the Company's AGM on 30 October 2025, the Group's total dividends for FY2025 will amount to 6.0 cents per ordinary share, bringing the cumulative dividends since becoming a listed company in 2003 to 134.9 cents per share. Excluding share price appreciation, this translates into a return of over 700% based on dividends alone for shareholders who have owned the Group's shares since its Initial Public Offering.
   
   The distribution reflects the Board and management's firm commitment to creating long-term, sustainable value for shareholders. This focus is underpinned by the Group's consistent adherence to strong governance practices at every level of the organisation. Since its listing in 2003, Micro-Mechanics has been recognised with nearly 40 awards for excellence in governance, transparency, and investor relations, most recently ranking 30th out of 467 Singapore-listed companies on the 2025 Singapore Governance and Transparency Index. Moving forward, the Group remains dedicated to enhancing shareholder returns through sustaining earnings growth, maintaining stable dividends, and upholding exemplary standards of corporate governance.

Business outlook
The Group has continued to demonstrate resilience amidst market volatility with tariff announcements initially in April 2025 and most recently in July 2025. As it heads into FY2026, the Group believes that it is well- positioned with a strong balance sheet to seize opportunities and navigate ongoing externalities in the long term, even as macroeconomic and geopolitical dynamics shift. The Group will also continue to maintain vigilance and take proactive measures to address any potential impacts affecting the business and its customers. With a disciplined growth strategy, strong balance sheet and proven track record of navigating past downcycles, the Group is confident in delivering on its ambitions to become a leading Next Generation Supplier of high-precision tools and parts used in process-critical semiconductor applications and drive sustainable longP-term value for its shareholders.