Ohmyhome Limited Price & Performance (OMH)

Thank you, Jenny. Thanks everyone for dialing in. To our presentation today. So I'm very pleased to be presenting our FY 2024 results to investors, shareholders and analysts today. Without further ado, I think we could just jump straight into the highlights. So I trust that most people on the call have seen our key numbers. And last year in 2024, think in the last quarterly webinar, we spoke about the production numbers of 2024 and we achieved production numbers of over 500,000 tonnes of ferroalloys. And I think that's the first time we're doing that in a very, very long time. So I think off the back of that, even with sort of price compression coming in in the second half of twenty twenty four, we saw that revenue grew just over 10%, around 11%. From 23% to FY '24. So we closed the year with a revenue of $654,300,000.0 And from that, we generated EBITDA of $76,000,000 So So I think in the last couple of years and this is something that I've touched OM, a couple of times, we have historically seen very close links between cash flow from operations and our EBITDA numbers. And so I'm very pleased that last year, I think we just saw this cycle normalized itself.

And so from that, we generated, let's see, US83.3 million sorry, excuse me, of cash from operations. So most of the cash that we generated last year went into loan repayments. So I think this is really just a feature of how the project finance work works. And I'll touch on that and it you have questions about this, we can take them at the end. But the long and short of it is that most of the cash generated from operations went into loan repayments, so 66,100,000.0 And we are in the last two years of that facility. So that will continue until a balloon repayment in 2026 sometime towards the end of the year. And so from the earnings, that represents $0.0122 of profit per share. And as we have announced, we're very pleased for the first time in a couple of years announced a dividend for shareholders. Next slide. So I think a better way to understand the earnings and EBITDA as you look at the price chart and I've talked about this in the last webinar we had at the quarterly. But I think it sort of bears mentioning now how things sort of played out in FY 'twenty four, right?

So ferrous silicon as you can see in the chart, it's incredibly flat. The blue line is almost no indiscernible features when you look at it from this vantage point in 2017 till today. But there has been a gradual decrease in price. In the first half of the year before it sort of picked up a bit. But I think Verusilukin Is At An Interesting Point. Today Because I Think When You Look At Coal Prices In China, coal prices in China, those are still coming down. When we look at the procurement costs of things we have purchased in Q1 compared to budget, we are looking at numbers $50 to $100 per metric ton lower. So I think there's room to go, and that's why we expect continued near term pressure for perils silicon Now it's no longer about the sort of supply side story, but really costs are coming down. And so we will see this obviously reflected in our costs as well, right, with a lag by the time the raw material arrives, it takes two or three months before you recognize it. Into the cost of goods sold. So I think that's that's actually a good thing for us.

And as I've said over the last couple of years, When base prices are low, it doesn't necessarily imply that profitability is low. You really have to see what's the what the recent price history of raw material prices [indiscernible] For the manganese alloys, last year was segmented quite distinctly into two halves. In the first half, we saw the gross margin. Then Tom, from SAB32 that led to really a lot of near term increase in prices both on the ore and the alloy side and I think the company very rightly capitalized on its products as much as we could at that point in time, sort of capture that bull market. At the same time, we had also hedged to a large degree our costs And so you see that profitability In the first half of twenty twenty four, was a little bit higher than the profitability in the second half of twenty twenty four. So I'll talk more about that when we get to the next couple of slides. In terms of where things stand today, I think really we are Normalization is a word that I've used I think it's the second webinar. But I really do think that that that's where we're heading.

At some point in time this year, we expect oil supply from Australia to normalize. We expect manganese ore prices to normalize and when we say normal manganese ore prices, what we really mean is they should be firmly between four to six and really more or less at the midpoint. And, you know, if you look at historical sort of, silicon manganese alloy prices, that generally corresponds to prices above $950 USD and that's where we see things moving to date. So those are all sort of healthy signs for the market. And for earnings. And in terms of ferrouslucan, really, I think we have to see where coal prices go, where sort of reduction prices go before we see those sort of bottom of market prices look like. And then from there, expect an uplift So in terms of the chart's guidance for the we've done that in the webinar. So the quarterly webinar, excuse me. I won't go through them again. But we are looking at a smidge lower in terms of production numbers compared to FY 2024. Off the back of maintenance, you know, not OM our side, but really in terms of car supply. Okay?

So, both silicon metal furnaces have also been switched to producing cathode silicon and they are currently run on ferrous ligand. I think when we look at the silicon metal market today in terms of really sort of commodity grade products, it's still under a lot of pressure. And we will continue to monitor, obviously, both ends and evaluate the profitability of both product lines So in FY 2024, I think we closed the year with GP margin 17.3%. For people who are looking at this on a sort of half yearly basis, And we've got this question from analysts as well. Back to what I was saying earlier about the manganese prices being quite distinctly different in the halves. I think we saw GP margins in the first half of twenty twenty four really reaching close to 20%. So that was actually a very, very sharp increase from FY 'twenty three where the second half was much poorer than the first So for two years now, right, we've seen this pattern where the first half we see a very high level of profitability before it declines. Due to price cycles and it just happened that it was sort of the shorter cycles were sort of six month intervals. [indiscernible] before sort of declining in the second half of twenty twenty four to a level close to 15%.

So that makes for full year 17.3%. And I think if you look at the EBITDA, of $76,000,000 for the year, So first of all, I think maybe close to 60% of that was made in the first half. And the remainder made in the second half. And but I think more interestingly, when you look at the composition of earnings, the contribution from smelting from trading has become a lot more stable. The structure I think is becoming apparent. And so I think that is a sign of stability. That's also a sign that the way the business has been designed to function, it's sort of functioning in the right way. Unfortunately, mining remained under CAD maintenance last year, so it recorded a negative contribution very marginally and that is something that the company is looking to turn around and we start in FY 2025.

So to conclude in terms of what that means for cash, gearing ratios have come down. I think it's a been on a continuous downtrend, which is only to be expected. That has been the company's focus over the last six to seven years, and that's something that we've repeated. We are at a point Today, where, you know, in the last twelve months, we've repeat $66,100,000 largely comprising of Sarawak's project finance only. And that's where most of the cash was spent. We close the year with more or less the same levels of cash that we started the year with. But we also at a point today, I think, that I've highlighted in the past really looking at what the optimal capital structure ought to look like. How should we be treating our debts because the chunk of the debt that we are sitting on today ostensibly was taken on for the purpose of the construction of Sarawak and we celebrated our tenth anniversary last year. So that in one shape or some shape or form has to continue. Obviously, we have to be we look at the sort of optimized capital structure sort of bearing on the side of caution.

And prudence, but still debt has a part in this. But what should that look like? What sort of maturities should we be targeting? I think that's something that the company is exploring and looking at So I think with that, we will go into the summary slide.

And again, this is a snapshot that we like to do so everyone has a good sense of what the total picture looks like. And I won't Talk too much about the slide, but I think we do have a long list of questions. So let's let's Great. Thank you very much, Adrian, for the presentation. We will now move on to the Q and A session. So the first question relates to text. It seems rather high for the company to record an income tax of €8,200,000 against a PBT of €17,000,000 Would you be able to explain on this Sure. Yes. So I mean, really at face value, you should not be taking that number dividing it by profit after tax because there are sort of deferred tax expense components, sort of non cash components to it. I think if you look at the notes to the FS that's all explained and set out. So what I would suggest is, if you look at those notes, and look at the cash portion that's actually going to be paid as taxes, divide that by income, then you will arrive at a number that's closer to the tax rates that that's levied OM us.

So in Singapore, [indiscernible] Right. Thank you, Adrian.

Now the second question is on inventories. I think we have received a fairly quite a fair bit of questions on inventories. So they all revolved around the similar nature. So I think Investors really want to know, like, what are the breakdown for inventories? And because it seems a bit high on our balance sheet. So we should be able to give some insights into the inventories lab as of thirty one December twenty twenty four? Yes.

Sure. So look, I think inventories consist of raw materials, finished products and power, right? And we have shed the power component of inventories in the past. It's not the vast majority of that inventory figure. So we can't share too much about that because of the confidential nature of our agreement with Sarak Energy. But I think if you just look at inventories as a category, that probably went up by like 20,000,000 from where we started the year in 2024 to the end of the year. The vast majority of that can be of that increase, to be precise, can be explained by higher raw material inventories. And that's because at the end of last year, the company took the decision to buy a bit more manganese ore and on account of we just lower all prices at that point in time and deferring certain sales from December into January and February because of where market prices were. We're not in a position, we're not in the business of speculating on the market, but if we have the opportunity to buy one more month or delay one more month of sale, We will occasionally make those decisions technically.

And I think that's really paid out, right? Because I think if you look at [indiscernible] at the end of last year it was probably something like $4 Today just in March, I think it's increased by more than 15%. So that's 15% saving in the cost of inputs And likewise, you will see that reflected in the sales and the selling prices as well. In terms of finished products, I don't believe that that increase in inventory value is significant. But obviously, it might play a part in $20,000,000 increase year on year. Thanks, Adrian.

Now the next question, I think you have briefly touched on during the presentation. This question is on the company's DAP. So this question is on whether do you have any general thoughts on financing For example, long term, there's short term debt and when to refinance the project debt Yeah. So So obviously, I think this is top of mind. And like I said earlier, we've passed [indiscernible] the project finance in its original state. Obviously, extended a couple of times for the various expansion projects that we have done So just very, very briefly recount in 2016, to 2017, converted six furnaces from ferrous lignin to manganese alloys, right, and very, very successfully so. We caught the market at the right time in 2017 and 2018, for shareholders who had around then, were really, really good years. Post that, we then did another round of furnace upgrades. But as conversions, two furnaces to metallic silicon and then two more furnaces to ferrous silicon. And obviously, in between [indiscernible] not really an item that you would typically consider to be funded by long term debt. So I'm trying to get at is through this long period, we've actually used a single debt instrument the project finance as a financing as a funding tool to fund all of these things.

Right? And I think at the group level, if you look at sort of debt that doesn't sit at the Sarawak asset level, if you look at debt that's sort of at the holding sort of operating intermediary operating company levels, then those debts will also taken on as sort of shortened debts by really financing things like the need to have more inventory, right? Also the need to have sort of not the entire portion, but part of the portion that went towards the acquisition of 25% stake in OMZR a couple of years back. So I think what the company as company matures from really a greenfield project into a steady state Really, I think at this point in time, top 10 will produce of these products, if not top five. We really need to look at sort of making sure that long term debt is financing sort of long term assets. And, you know, shortens that is financing short term working capital needs inventory turnaround like last year when we had sort of two month requirements, three month requirements for manganese or these things have to be sort of lined up and I think perhaps something that we try to do Unfortunately, just prior to COVID.

So that set plans back a bit. And then here we are five years OM, but I think that's something that we really need to examine and restructure because the current state of the project finance obviously places a lot of restrictions in terms of how you can deploy working capital, how those lines are made available to you. And what things what can or cannot be done at the assets. So I think that's something that again, is a focus of the company. Is a focus of the company. This year, I've mentioned this at the quarterly webinar and sort of unpacking that from the current financing structure we'll also be a key priority for Protected 25. Right. Thank you, Adrian.

I think we have reached the very last question. So this is more on macroeconomic side of things. What are the impact of U. S. Tariffs for all major OM the business?

Yeah. Sure. Those I mean, this is very question. And we don't receive this question. Several times in the last couple of weeks. The long story short is that the immediate and near term impact is positive because our customers assume makers they are enjoying [indiscernible] period of strength really at this point in time and we have been supplying them since we pivoted into The U. S. With about 10% of our sales really not the bulk of our production. And we are seeing you know, the fruits from that move. And I think in the last couple of weeks as well, some customers have reached out to to really just top up their purchases and commit towards purchasing larger volumes in the year. And I think if you look at the price differential, in The U. S, and Asia because of the way we are shipping, because of the way we are able to load three products, don't think there's a single producer in the world that is loading three different alloys to The U. S. Today because of the way we're able to organize those logistics, the scale in which we're operating, you know, the amount that we are selling into The U. S, is not small, but it's only 10% of our output.

Those returns, I think, at any given point in time, in the last two months or so would be between $50 to $100 higher than the general return in Asia. And obviously, this is not any specific customer, any specific product, but really just you can't win all of them, you win some and you lose them. But if you look at it on an aggregate basis, that is the returns Those are the returns, sorry, that we're looking at. So for now, it's positive. Obviously, we are also at the same time it's all fun and roses. We're also waiting the results of the anti dumping investigation for Ferrouslica Into The U. S. U. S. We've put up a credible defense We've submitted the final rebuttals and then counterpoints and then yes, we look forward to hearing and seeing the results of those as well. All right. Thanks, Ajin.

So that appears to cover the major idea of the questions from our audience today. If you do have any further questions, please forward them to investor.relationsonmaterials.com will make a recording of this webinar available via ON Holdings' LinkedIn in the coming days This concludes our webinar for today. Thank you everyone for attending and thank you, Adrian, for the comprehensive update.

Thank you. Thanks everyone for dialing in.