Harrisons Holdings (Malaysia) Berhad Q2 2025: Navigating Headwinds with Resilience
Greetings, fellow investors! Today, we’re diving into the latest financial performance of Harrisons Holdings (Malaysia) Berhad (HHMB), a diversified player deeply embedded in the Malaysian economy, especially across Fast-Moving Consumer Goods (FMCG), building materials, and more. This report covers their second financial quarter, ending 30 June 2025, offering a snapshot of how the company is performing amidst the current economic climate.
The latest results present a mixed picture: while the company achieved a slight uptick in year-to-date revenue, profit before tax saw a dip. This indicates the challenges Harrisons is facing, particularly from rising operating costs and a dynamic market landscape. Yet, their strategic focus on key divisions and adaptability remain crucial. Let’s explore the numbers and the insights behind them.
Key Takeaway: Harrisons Holdings recorded a modest 0.25% increase in year-to-date revenue, reaching RM1.16 billion, demonstrating resilience in its core business segments despite a 12.96% decline in year-to-date profit before tax.
Q2 2025 Performance Overview: A Closer Look at the Quarter
For the individual quarter ended 30 June 2025, Harrisons Holdings experienced a slight decrease in revenue and a noticeable decline in profitability compared to the same period last year. This reflects prevailing market conditions and specific operational pressures.
Current Quarter (Q2 2025)
Revenue: RM534.55 million
Profit Before Tax (PBT): RM13.24 million
Profit After Tax (PAT): RM9.91 million
Earnings Per Share (EPS): 2.90 sen
Previous Corresponding Quarter (Q2 2024)
Revenue: RM535.05 million
Profit Before Tax (PBT): RM16.14 million
Profit After Tax (PAT): RM11.99 million
Earnings Per Share (EPS): 3.47 sen
The revenue for the current quarter saw a marginal decrease of RM0.51 million or 0.09% compared to the previous corresponding quarter. This was primarily attributed to a decrease in sales from the Building Materials and Engineering Products Division.
More significantly, profit before tax for Q2 2025 was RM2.90 million or 17.99% lower. Several factors contributed to this:
- Gross Profit Margin slightly dipped from 11.75% to 11.51%, mainly due to lower incentives earned.
- Administrative expenses rose by RM1.45 million, primarily driven by the increase in minimum wages implemented since February 2025.
- A provision for doubtful debts of RM1.04 million was made, contrasting with a reversal of RM0.10 million in the previous corresponding quarter.
- The company recorded a provision for fair value loss on financial assets at Fair Value Through Profit or Loss (FVTPL) of RM0.26 million due to a decline in the local stock market affecting its unit trust investments.
Year-to-Date (YTD) Performance Deep Dive
Looking at the year-to-date figures up to 30 June 2025, the picture presents a slightly different narrative with revenue growth, but continued pressure on profits.
Current Year To-date (YTD Q2 2025)
Revenue: RM1.16 billion
Profit Before Tax (PBT): RM31.11 million
Profit After Tax (PAT): RM23.40 million
Earnings Per Share (EPS): 6.81 sen
Previous Corresponding Period (YTD Q2 2024)
Revenue: RM1.16 billion
Profit Before Tax (PBT): RM35.74 million
Profit After Tax (PAT): RM26.88 million
Earnings Per Share (EPS): 7.85 sen
Year-to-date revenue for June 2025 increased by RM2.84 million, or 0.25%, compared to the same period last year. This growth was largely propelled by increased sales from certain agencies within their Fast-Moving Consumer Products division.
However, the year-to-date profit before tax declined by RM4.68 million, or 12.96%. The primary reasons mirror those observed in the quarterly performance:
- Administrative expenses rose by RM3.72 million due to the minimum wage increase.
- Provision for doubtful debts increased by RM1.28 million, particularly due to slower trade receivables collection in Sabah during 2025.
- A higher provision for fair value loss on financial assets at FVTPL of RM0.33 million further impacted profitability, as the local stock market experienced a downturn affecting unit trust investments.
Segmental Performance Breakdown
Harrisons Holdings operates through three main segments: Trading and Distribution, Retailing, and Shipping and Others. The contribution from each segment highlights varying dynamics:
| Segment | YTD June 2025 (RM’000) | YTD June 2024 (RM’000) | Change (RM’000) | Growth (%) |
|---|---|---|---|---|
| Trading and Distribution | 1,133,967 | 1,130,943 | 3,024 | 0.27 |
| Retailing | 17,087 | 16,693 | 394 | 2.36 |
| Shipping and Others | 7,990 | 8,566 | (576) | -6.72 |
| Total Group Revenue | 1,159,044 | 1,156,202 | 2,842 | 0.25 |
Trading and Distribution Segment
This segment, encompassing Fast-Moving Consumer Goods (FMCG), Building Materials and Engineering Products, and Industrial and Agriculture Chemical products, remains the Group’s powerhouse, contributing 97.84% of total revenue. While overall segment revenue increased by 0.27%, there were mixed performances within:
- FMCG: Sales increased by RM22.05 million or 2.49%, showing strong performance in this core area.
- Building Materials and Engineering Products: Sales decreased by RM23.73 million or 10.49%, mainly due to sluggish business activity and slower construction projects.
- Industrial and Agriculture Chemicals: Sales rose by RM4.70 million or 16.89%, driven by increased demand in Sabah.
Despite the revenue increase, Profit Before Interest and Tax (PBIT) for this segment decreased by 5.47% to RM33.39 million (from RM35.32 million last year), impacted by higher minimum wages, increased provision for doubtful debts, and lower margins.
Retailing Segment
Comprising Famous Amos Cookies operations in Singapore, this segment’s revenue grew by 2.36% (RM0.39 million) due to higher sales. However, the segment recorded a Loss Before Interest and Tax of RM0.03 million, a significant reversal from a profit of RM0.11 million in the previous year. This was due to lower gross profit margins from increased cookie batter prices and higher salary-related expenses in Singapore.
Shipping and Others Segment
This segment, which includes shipping, insurance, and travel agency commissions, saw a revenue decrease of 6.72% (RM0.58 million), primarily from lower shipping agency fees in Sabah. Its PBIT also fell sharply by 58.48% to RM1.49 million, compounded by higher fair value losses on financial assets at FVTPL.
Financial Health Check
As of 30 June 2025, Harrisons Holdings maintained a stable financial position:
- Total Assets stood at RM940.30 million, slightly down from RM974.73 million as of 31 December 2024.
- Total Liabilities decreased to RM453.69 million from RM511.60 million at the end of 2024.
- Net Assets Per Share improved to RM1.41 from RM1.34 at year-end 2024.
The Group’s borrowings primarily consist of short-term Bankers’ acceptance, totaling RM166.63 million as of 30 June 2025, a decrease from RM185.68 million in June 2024. Average interest rates for borrowings have seen minor increases, with Bankers’ acceptance at 3.82% (compared to 3.72% in 2024) and new rates for bank overdrafts (6.88%) and revolving credits (5.02%).
Trade receivables amounted to RM380.06 million, with RM327.93 million being neither past due nor impaired. However, the increase in provision for doubtful debts highlighted slower collections, particularly in Sabah.
Contingent liabilities, primarily unsecured corporate guarantees to financial institutions and third parties, stood at RM195.39 million for the Group.
Navigating the Headwinds and Looking Ahead
Malaysia’s Gross Domestic Product (GDP) is projected to grow by 4.1% in 2025, supported by resilient domestic demand. Harrisons Holdings’ business nature is generally aligned with this economic growth. However, the company acknowledges several key challenges that could affect its Fast-Moving Consumer Products division:
- Subdued consumer sentiment, which could impact purchasing power and demand.
- The prevalence of parallel imports offering lower selling prices, intensifying competition.
- New competitors entering the East Malaysia market, potentially eroding market share.
In response, management is committed to working closely with its major principals to navigate these challenges. Despite the short-term pressures, the Group expects its long-term growth prospects to remain intact, assuming no unforeseen circumstances arise.
Summary and Investment Recommendations
Harrisons Holdings (Malaysia) Berhad’s Q2 2025 report reveals a company operating in a challenging environment. While year-to-date revenue showed a commendable slight increase, profitability was impacted by rising operational costs, primarily minimum wage adjustments, increased provisions for doubtful debts, and fair value losses on financial assets. The diversified business segments experienced varied performances: FMCG and Industrial Chemicals showed growth, while Building Materials and Retailing faced headwinds due to market slowdowns and cost pressures. The company maintains a stable balance sheet with managed borrowings.
The management’s focus on collaborating with principals to address competitive pressures and market sentiments is a pragmatic approach. While the immediate outlook presents challenges, the long-term prospects are viewed as stable, underpinned by Malaysia’s economic growth projections.
Please note: This blog post provides an analysis of the company’s financial report and is not intended as an investment recommendation to buy or sell securities.
- Rising Operating Costs: Increases in minimum wages and other administrative expenses directly impact profitability across all segments.
- Market Competition & Consumer Sentiment: Subdued consumer sentiment, parallel imports, and new market entrants, particularly in East Malaysia, pose significant competitive threats to the FMCG division.
- Segment-Specific Challenges: The Building Materials division is vulnerable to slowdowns in construction activities, while the Retailing segment faces pressure from rising input costs and wages in Singapore.
- Financial Asset Volatility: Fluctuations in the local stock market can lead to fair value losses on financial assets, affecting overall profitability.
- Trade Receivables Management: Slower collection of trade receivables, as noted in Sabah, highlights potential liquidity risks and the need for robust credit management.
Harrisons Holdings (Malaysia) Berhad demonstrates resilience through its diversified business model, but the latest quarterly report underscores the immediate pressures from a dynamic operating landscape. What are your thoughts on Harrisons’ ability to sustain its long-term growth trajectory amidst these evolving market dynamics? Share your insights in the comments section below!
For more detailed analyses of Malaysian companies, explore our other articles in the “Company Reports” section.
