Gallant Venture's Loss Per Share Widens: A Closer Look at FY 2024 Earnings

As the financial year 2024 comes to a close, Gallant Venture (SGX:5IG) has reported a widening net loss and an increased loss per share compared to the previous year. In this article, we'll delve into the key factors contributing to these developments and explore how the company can manage its operational expenses and other costs to improve profitability.

Gallant Venture's revenue growth trajectory has been somewhat volatile over the past few years. In 2020, the company's revenue was S$138.2 million, which decreased by 20.35% to S$110.5 million in 2021. However, the company managed to bounce back in 2022, with revenue increasing by 14.98% to S$128.4 million. In 2023, revenue grew by a further 9.49% to S$140.5 million. However, in 2024, revenue growth slowed down to 4.49%, with the company reporting S$147.1 million in revenue.

This volatility in revenue growth has had a significant impact on the company's profitability. In 2020, the company reported a net loss of S$19.64 million, which widened to S$61.93 million in 2021. The company managed to reduce its net loss in 2022 to S$49.11 million, but it widened again in 2023 to S$690.32 million. In 2024, the company reported a net loss of S$57.37 million.

The company's profit margin has also been affected by the volatility in revenue growth. In 2020, the company's profit margin was -13.07%, which improved to -8.12% in 2021. However, the company's profit margin deteriorated to -497.43% in 2022, before improving to -30.06% in 2023. In 2024, the company's profit margin was -38.30%.

The company's free cash flow margin has also been affected by the volatility in revenue growth. In 2020, the company's free cash flow margin was -1.49%, which improved to 5.88% in 2021. However, the company's free cash flow margin deteriorated to -14.10% in 2022, before improving to -7.21% in 2023. In 2024, the company's free cash flow margin was -39.19%.



Gallant Venture's key operational expenses and other costs that have driven its financial performance include:

1. Selling, General & Admin (SG&A) expenses: In 2024, SG&A expenses were S$20.39 million, which is higher than the previous year's S$23.42 million. This increase in SG&A expenses could be due to higher marketing, sales, and administrative costs. To manage these expenses and improve profitability, Gallant Venture could:
- Review and optimize marketing strategies to ensure they are cost-effective and drive sales growth.
- Streamline administrative processes to reduce costs without compromising efficiency.
- Negotiate better terms with suppliers to reduce input costs.

2. Other Operating Expenses: In 2024, other operating expenses were S$146.5 million, which is higher than the previous year's S$138.11 million. These expenses could include research and development, depreciation, and amortization. To manage these expenses, Gallant Venture could:
- Prioritize R&D spending on high-impact projects that drive revenue growth.
- Optimize depreciation and amortization schedules to align with the useful life of assets.
- Review and renegotiate contracts with service providers to reduce costs.

3. Interest Expense: In 2024, interest expense was S$50.45 million, which is higher than the previous year's S$37.52 million. This increase could be due to higher borrowing costs or increased debt levels. To manage interest expenses, Gallant Venture could:
- Explore refinancing options to secure lower interest rates.
- Reduce debt levels by improving cash flow management and generating more profits.
- Diversify funding sources to reduce reliance on debt financing.

4. Impairment of Goodwill and Gain (Loss) on Sale of Assets: In 2024, there was an impairment of goodwill of S$1.81 million, which negatively impacted profitability. To manage this, Gallant Venture could:
- Conduct regular impairment reviews to identify and address any potential issues early.
- Evaluate strategic options for underperforming assets, such as selling or divesting them.

By effectively managing these operational expenses and other costs, Gallant Venture can improve its profitability and overall financial performance. The company should also focus on driving revenue growth and maintaining a healthy balance between expenses and revenue.

In conclusion, Gallant Venture's widening net loss and increased loss per share in FY 2024 can be primarily attributed to increased operating expenses, higher net interest expense, and a loss on equity investments. To improve profitability, the company should focus on managing its key operational expenses and other costs, driving revenue growth, and maintaining a healthy balance between expenses and revenue.