MAINBOARD-LISTED Nanofilm Technologies : MZH 0% posted a 19 per cent rise in revenue to S$39 million for its first quarter ended Mar 31, 2024, the group said in a business update on Monday (Apr 22).

This was up from revenue of S$33 million in the corresponding year-ago period.

The group, which specialises in advanced materials and coatings, attributed the increase in revenue primarily to the recovery of its consumer business segment despite an “uncertain operating environment”.

Its advanced materials business unit grew 41 per cent year on year in Q1 FY2024. This was driven by a 51 per cent growth in its computer, communication and consumer (3C) sector, as well as 24 per cent growth in automotive segments, said the group.

Other industrial segments posted 21 per cent growth for the quarter, as these included inaugural contributions from German professional thin-film coating solutions provider AxynTeC Dünnschichttechnik, which Nanofilm acquired in December 2023.

Smartphones were the biggest contributor of revenue to the group’s 3C sector, accounting for 44 per cent of revenue. Nanofilm added that the onboarding of a new customer also contributed significantly to growth, alongside a recovery in demand from existing customers.

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Meanwhile, its nanofabrication business unit remained relatively stable in line with the current production status of its projects and as Sydrogen continues its mass production for a key customer, said the group.

Sydrogen is a joint venture between Nanofilm and Temasek Holdings.

However, its industrial equipment business unit saw a 66 per cent decline due to a softer order book.

Meanwhile, Nanofilm’s operational performance in Q1 FY2024 also improved, driven by efforts to expand the revenue base and streamline costs. Its gross profit for the quarter rose to S$12.8 million, up from S$9.8 million the year before.

The group believes that its consumer segment will be the main driver of revenue growth in FY2024 as it noted a “strong pipeline outlook”.

“Other segments, in particular the industrial segment, present bright prospects due to our market expansion in Europe as well as Sydrogen’s (BPP coatings) production to cater to additional automotive customers,” it said.

It expects profitability to improve in FY2024 from the continuous optimisation of cost structures, coupled with lower capital expenditure year on year.

Shares of Nanofilm closed at S$0.61 on Monday, up S$0.01 or 1.7 per cent, before the business update.