SOFTCARE (SEHK: 02698) has announced a positive profit alert, projecting significant growth for the first half of 2026.
The company expects to achieve: (i) revenue of no less than US$328 million for H1 2026, representing a minimum 28% increase compared to approximately US$255 million in H1 2025; (ii) profit of no less than US$73 million for H1 2026, marking a minimum 40% rise from the approximately US$52 million profit in H1 2025; and (iii) adjusted net profit (a non-IFRS measure) of no less than US$75 million for H1 2026, a minimum 47% increase from the adjusted net profit of approximately US$51 million in H1 2025.
The board attributes this growth primarily to several key factors.
Revenue Drivers
Revenue growth is credited to a combined increase in both sales volume and average selling price during the first half of 2026.
The group has solidified its leading position in core markets such as East and West Africa, and in major African hygiene product markets, by deepening sales channels, optimizing production layouts, and exploring new markets.
It has expanded product exports to neighboring countries and is actively developing the Latin American hygiene products market, contributing to the overall sales volume increase.
Additionally, the average selling price for various product categories improved due to the strengthening of most operating currencies against the US dollar in H1 2026 compared to H1 2025, including the Ghanaian cedi, Zambian kwacha, West African CFA franc, and Central African CFA franc.
Profit Growth Factors
The profit growth for H1 2026 is mainly due to: (i) increased gross profit driven by the aforementioned revenue growth; (ii) a rise in interest income from bank balances, primarily resulting from proceeds from the company's listing in November 2025, which led to higher average bank balances held during H1 2026; and (iii) the absence of listing expenses in H1 2026, creating savings compared to H1 2025.
This growth was partially offset by (iv) net foreign exchange losses incurred in H1 2026 due to currency depreciation, such as the euro against the US dollar.
Adjusted Net Profit Performance
As the adjusted net profit (non-IFRS) figures for both H1 2026 and H1 2025 exclude the impact of listing expenses and net foreign exchange gains/losses, the growth in H1 2026 adjusted net profit is primarily attributed to the factors described in points (i) and (ii) of the profit growth section above.
The adjusted net profit of approximately US$51 million for H1 2025 was calculated by adding back approximately US$2 million in listing expenses and US$1 million in share-based payment expenses to the profit of about US$52 million, and then deducting approximately US$4 million in net foreign exchange gains.
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