Greetings, fellow investors and market watchers!
Today, we’re diving into the latest financial pulse of LION POSIM BERHAD with their interim financial report for the second quarter ended 30 June 2025. While the headlines might show a mixed bag of results, a deeper look reveals some interesting dynamics within the company’s operations and its strategic forward march. We’ll unpack the core figures, explore the performance drivers behind each business segment, assess the company’s financial health, and cast an eye on their future prospects, including their ambitious diversification into property development. Ready to get informed? Let’s go!
LION POSIM BERHAD: A Mixed Financial Picture for Q2 2025
LION POSIM BERHAD has released its second-quarter report, showing a robust increase in operational profit for the quarter but a decline in overall net profit. This report highlights the company’s ongoing efforts to enhance efficiency within its core businesses while navigating a challenging economic landscape and preparing for a significant strategic shift into property development.
Core Financial Highlights: Quarter and Year-to-Date Performance
Let’s begin with a look at LION POSIM BERHAD’s performance for the individual quarter (Q2 2025) compared to the same period last year (Q2 2024), followed by the year-to-date figures. These comparisons are crucial for understanding the company’s trajectory.
Individual Quarter (Q2 2025 vs Q2 2024)
Q2 2025
Revenue: RM163,070,000
Profit from Operations: RM2,722,000
Profit Before Tax (PBT): RM1,179,000
Profit for the Period: RM502,000
Basic Earnings Per Share (EPS): 0.22 sen
Q2 2024
Revenue: RM175,876,000
Profit from Operations: RM1,971,000
Profit Before Tax (PBT): RM1,868,000
Profit for the Period: RM1,183,000
Basic Earnings Per Share (EPS): 0.52 sen
For the second quarter ended 30 June 2025, LION POSIM BERHAD saw its revenue dip by 7% to RM163.1 million. Despite this, profit from operations showed a commendable 38% increase, reaching RM2.7 million. However, after accounting for finance costs and a higher share of losses from associated companies, Profit Before Tax (PBT) decreased by 37% to RM1.2 million, leading to a 58% drop in Profit for the Period to RM0.5 million. Consequently, basic Earnings Per Share (EPS) stood at 0.22 sen, down from 0.52 sen in the same quarter last year.
Year-to-Date Performance (H1 2025 vs H1 2024)
H1 2025
Revenue: RM347,263,000
Profit from Operations: RM4,972,000
Profit Before Tax (PBT): RM2,431,000
Profit for the Period: RM1,312,000
Basic Earnings Per Share (EPS): 0.58 sen
H1 2024
Revenue: RM360,371,000
Profit from Operations: RM5,723,000
Profit Before Tax (PBT): RM5,162,000
Profit for the Period: RM3,534,000
Basic Earnings Per Share (EPS): 1.55 sen
Looking at the first half of 2025, revenue saw a 4% decline to RM347.3 million compared to the same period in 2024. Profit from operations decreased by 13% to RM5.0 million. However, it’s worth noting that if we exclude a significant RM3.2 million insurance claim received by the Lubricants Division in the prior year, the Group’s profit from operations would have almost doubled, largely due to improved gross margins from the Building Materials Division. Nonetheless, overall PBT for the period was down 53% to RM2.4 million, and Profit for the Period fell by 63% to RM1.3 million, resulting in an EPS of 0.58 sen.
Deep Dive into Business Unit Performance
Understanding the individual segments provides clarity on the overall performance:
Building Materials and Steel Products (Building Materials)
This division recorded a higher profit of RM3.5 million for the first half of 2025, marking a significant 65% increase despite a 4% decrease in revenue to RM293.2 million. The revenue decline was primarily due to lower sales of steel products and building materials. The improved profit highlights the success of ongoing efforts to enhance gross margins, a testament to effective cost management and operational efficiency.
Lubricants, Petroleum Products, and Automotive Products (Lubricants)
For the first six months of 2025, the Lubricants Division’s revenue marginally declined to RM52.9 million. Profit decreased by 29% to RM4.8 million from RM6.8 million in the corresponding period last year. It’s important to remember that the prior year’s profit included a one-off RM3.2 million recovered from an insurance claim related to flood losses. Adjusting for this, the underlying performance of the division would appear more stable.
Others
The ‘Others’ division, encompassing training services, consumer product distribution and retailing, investments in Cambodia, and investment holding, contributed RM1.2 million in revenue for the first half of 2025. This segment recorded a loss of RM3.4 million for the period, indicating ongoing challenges or investments in these diverse ventures.
Snapshot of Financial Status
Let’s review the company’s financial health as at 30 June 2025:
| Financial Indicator | 30 June 2025 (RM’000) | 31 December 2024 (RM’000) | Change |
|---|---|---|---|
| Total Assets | 932,968 | 915,668 | Up |
| Total Equity | 758,595 | 762,751 | Down slightly |
| Net Assets Per Share (RM) | 3.33 | 3.35 | Down slightly |
| Total Borrowings (30.6.2025 vs 30.6.2024) | 53,451 | 38,094 | Up by 40% |
| Cash and Cash Equivalents | 54,494 | 51,323 | Up |
As of 30 June 2025, LION POSIM BERHAD’s total assets increased to RM933.0 million, while total equity saw a slight reduction to RM758.6 million, leading to a minor decrease in net assets per share to RM3.33. A notable point is the increase in total borrowings by approximately 40% to RM53.5 million compared to the same period last year (30 June 2024), driven primarily by an increase in non-current term loans. Despite this, cash and cash equivalents showed a healthy increase to RM54.5 million, reflecting positive cash flow from operating activities, though less than the prior year.
Risks and Prospects: Navigating Economic Headwinds and Future Growth
The Group acknowledges that the operating environment is expected to remain challenging and uncertain, influenced by both global and domestic economic conditions. This uncertainty requires LION POSIM BERHAD to maintain a vigilant and adaptive approach.
In response, the company remains steadfast in its focus on key strategies:
- Cost Containment: A crucial focus to protect margins amidst potential revenue pressures and rising operational costs.
- Improving Operational Efficiency: Continuous efforts to streamline processes and maximize output from existing resources. The improved gross margin in the Building Materials division is a testament to this.
- Market Responsiveness: Staying agile and ready to adapt to sudden market shifts and evolving consumer demands.
Beyond these immediate operational strategies, LION POSIM BERHAD is also charting a new course with its proposed diversification into property development through an unincorporated joint venture in Shah Alam, Selangor. This ambitious move, which has received shareholder approval, signifies a strategic long-term play to tap into new revenue streams and potentially unlock significant value. The approvals from relevant regulatory authorities are still pending, but this represents a major growth catalyst for the company.
Summary and Investment Recommendations
LION POSIM BERHAD’s Q2 2025 report presents a nuanced picture. While the Group experienced a decline in overall profit due to external factors like higher associated company losses and the absence of prior year’s one-off gains, its core operations, particularly the Building Materials division, demonstrated impressive margin improvements. The company is actively managing its costs and enhancing efficiency to navigate a volatile economic landscape. The significant move towards property development highlights a forward-looking strategy aimed at diversification and long-term growth. It’s crucial for investors to remember that this blog post provides an analysis of the financial report and does not constitute any investment recommendation to buy or sell securities.
Key points to monitor moving forward include:
- The progress and timeline for regulatory approvals on the proposed property development venture.
- The company’s ability to maintain and further enhance operational efficiencies and gross margins across its existing divisions.
- The impact of global and domestic economic conditions on demand for building materials and lubricants.
- The performance of associated companies and their contribution to the Group’s bottom line.
LION POSIM BERHAD is clearly at an interesting juncture, balancing traditional business performance with a bold new strategic direction. The journey ahead will undoubtedly be one to watch.
What are your thoughts on LION POSIM BERHAD’s latest results and its strategic pivot into property development? Do you think the company can successfully navigate the current challenges and capitalize on new opportunities? Share your insights and perspectives in the comments below!