Greetings, fellow investors and market watchers! We’re diving deep into the latest financial pulse of GFM Services Berhad (GFM), a prominent player in Malaysia’s facilities management, concession, and oil & gas sectors. The company has just released its unaudited consolidated results for the second quarter ended 30 June 2025 (2Q 2025), and it’s a report that paints a picture of strategic maneuvering amidst a dynamic market landscape.
At first glance, GFM’s performance for the first half of 2025 shows a resilient stance. While overall revenue saw a slight dip, the company demonstrated impressive agility in its core operations, leading to stronger gross profit margins. With a robust order book and exciting new ventures on the horizon, GFM appears to be laying down a solid foundation for future growth. Let’s unpack the numbers and strategic moves shaping GFM’s journey.
GFM’s Performance Snapshot: Navigating Growth in a Dynamic Environment
GFM’s first half of 2025 (1H 2025) presents a mixed bag of results, highlighting both challenges and strategic wins. Let’s break down the key figures compared to the same period last year:
1H 2025 Performance
Revenue: RM100.3 million (down 3.1% YoY)
Gross Profit: RM36.5 million (up 5.8% YoY)
Gross Profit Margin: 36.4% (up from 33.3% YoY)
Profit Before Tax (PBT): RM17.0 million (down 10.9% YoY)
Net Profit (Attributable to Equity Holders): RM11.8 million (down 1.7% YoY)
Basic Earnings Per Share (EPS): 1.55 sen (down from 1.64 sen YoY)
1H 2024 Performance
Revenue: RM103.5 million
Gross Profit: RM34.5 million
Gross Profit Margin: 33.3%
Profit Before Tax (PBT): RM19.1 million
Net Profit (Attributable to Equity Holders): RM12.0 million
Basic Earnings Per Share (EPS): 1.64 sen
While revenue for 1H 2025 saw a modest decline of 3.1% year-on-year (YoY) to RM100.3 million, driven mainly by lower Facilities Management (FM) contributions, GFM impressively boosted its Gross Profit by 5.8% YoY to RM36.5 million. This indicates a more favorable revenue mix and efficient cost management, pushing gross profit margins to a healthy 36.4% from 33.3% a year ago.
However, Profit Before Tax (PBT) decreased by 10.9% to RM17.0 million, and Net Profit slightly tapered by 1.7% to RM11.8 million. This was largely influenced by higher administrative expenses related to corporate exercises and business development, as well as increased finance costs, which rose to RM12.94 million from RM9.57 million in 1H 2024.
Segmental Performance: A Closer Look
Understanding GFM’s diverse business units helps explain the overall performance:
| Segment | 1H 2025 Revenue (RM’000) | 1H 2024 Revenue (RM’000) | YoY Change (%) | Contribution to Total Revenue (1H 2025) |
|---|---|---|---|---|
| Facilities Management (FM) | 52,392 | 59,900 | -12.6% | 52.2% |
| Oil and Gas (O&G) | 33,609 | 28,600 | +17.5% | 33.5% |
| Concession Arrangements | 14,300 | 15,000 | -4.7% | 14.3% |
| Total External Revenue | 100,312 | 103,500 | -3.1% | 100.0% |
- Facilities Management (FM): The largest segment, contributing RM52.4 million, saw a decrease primarily due to a reduction in repair works completed during the period.
- Oil & Gas (O&G): This division was a standout performer, with revenue soaring by 17.5% YoY to RM33.6 million. This growth was fueled by additional work orders under the PETRONAS’ TA4MS contract at the Pengerang Integrated Complex (PIC).
- Concession Arrangements: Revenue from this segment, primarily from the UiTM Mukah campus concession, declined slightly to RM14.3 million. This is a natural amortization effect, where the accrued interest income reduces as the financial asset matures over time.
Quarter-on-Quarter (QoQ) Performance: A Sign of Momentum
Looking at the quarter-on-quarter (QoQ) performance, GFM showed positive momentum:
Q2 2025 Performance
Revenue: RM52.4 million (up 9.2% QoQ)
Profit Before Tax (PBT): RM8.5 million (stable QoQ)
Net Profit: RM5.8 million (down from RM6.0 million QoQ)
Q1 2025 Performance
Revenue: RM48.0 million
Profit Before Tax (PBT): RM8.5 million
Net Profit: RM6.0 million
Revenue climbed by 9.2% quarter-on-quarter to RM52.4 million, driven by increased variation orders in the FM segment and additional O&G contracts in non-primary coverage areas. Despite this revenue growth, net profit slightly decreased from RM6.0 million in 1Q 2025 to RM5.8 million in 2Q 2025 due to a higher effective tax rate of 32.6% compared to 29.4% in the previous quarter.
Financial Health and Cash Flow
GFM’s balance sheet remains robust. As at 30 June 2025, total assets stood at RM662.18 million, an increase from RM621.17 million at FYE 2024. Total equity also grew to RM219.44 million from RM213.52 million. Net assets per share improved slightly to RM0.22 from RM0.21.
Total borrowings increased to RM333.92 million from RM312.15 million, reflecting strategic financing activities, including the issuance of Sukuk amounting to RM55 million during the period. Cash and cash equivalents at period-end were RM53.57 million, a decrease from RM73.89 million a year ago. Net cash from operating activities for 1H 2025 was RM6.59 million, a notable decrease from RM12.68 million in 1H 2024, influenced by movements in working capital like trade and other receivables. However, net cash from investing activities showed a positive turnaround, flowing in RM6.43 million compared to an outflow of RM17.35 million in 1H 2024, boosted by a RM6.0 million dividend received.
Strategic Outlook: Fueling Future Growth
GFM’s future prospects are underpinned by several strategic initiatives and a healthy pipeline of projects:
Strong Order Book and Earnings Visibility
As at 30 June 2025, GFM boasts an outstanding order book of RM1,085.8 million. This substantial figure provides long-term earnings stability and visibility, with key contributions from:
- KP Mukah Concession: RM725.2 million, extending until 2035 for the UiTM Mukah campus.
- JKR Contract: RM170.8 million, running until July 2027.
Facilities Management (FM) Segment: Tapping into Infrastructure Development
GFM remains optimistic about its FM segment. The company is actively pursuing opportunities arising from ongoing infrastructure developments and supportive government initiatives like the Public-Private Partnership (PPP) Master Plan 2030 (PIKAS 2030). These macro trends are expected to drive demand for FM services, creating significant growth prospects for established players like GFM.
Oil & Gas (O&G) Division: Strategic Expansion and Major Turnarounds
The O&G maintenance segment continues to perform strongly. With the successful turnaround of Highbase Strategic Sdn. Bhd. (HSSB), GFM is better positioned to secure new projects. The segment is anchored by PETRONAS’ TA4MS contract for plant maintenance services at the Pengerang Integrated Complex (PIC) in Johor. Looking ahead, major plant turnarounds scheduled at PIC in 2026 and 2027 are anticipated to generate significant maintenance activity.
Furthermore, the proposed acquisition of a 60% stake in Shapadu Energy Sdn Bhd (Shapadu Energy) is a significant strategic move. Shapadu Energy, through its subsidiary Shapadu CR Asia (SCRA), also holds the TA4MS contract. This acquisition is expected to significantly expand GFM’s presence in the O&G market, providing further access to long-term, high-value maintenance work and reinforcing its position as a key player.
Rest and Service Area (RSA) Initiative: A New Stream of Recurring Income
GFM’s venture into the RSA business is progressing steadily. The regulatory approval process for the first RSA at Sungai Muda along the PLUS North-South Expressway is underway, poised to meet the rising demand for additional rest stops. Targeted for commencement within the next two years, this project will mark GFM’s entry into a new business segment, complementing its existing portfolio and providing a new stream of recurring income. Other proposed RSA projects are located at Bemban, Melaka, and Karak, Pahang.
Summary and Investment Recommendations
GFM Services Berhad’s Q2 2025 report reveals a company that is strategically positioning itself for sustained growth, despite a slight dip in overall revenue for the first half of the year. The impressive growth in its Oil & Gas segment, coupled with a robust order book and new ventures like the RSA initiative, paints a picture of a management team focused on diversifying income streams and leveraging market opportunities. The improvement in gross profit margins also highlights operational efficiencies.
However, investors should also consider the increase in finance costs and the impact of higher effective tax rates on net profit. The Facilities Management segment’s performance will be crucial to monitor as it remains the largest contributor to revenue. The successful integration of new acquisitions and the execution of new projects like the RSA will be key to realizing the full potential of these strategic moves.
Key areas to watch for GFM’s future development include:
- The successful execution and progressive revenue recognition from its substantial order book.
- The performance and integration of the proposed Shapadu Energy acquisition, and its impact on the O&G segment.
- The progress and commencement of the new RSA projects, establishing a new recurring income stream.
- Continued focus on managing finance costs and optimizing the effective tax rate.
- Ability to secure new contracts and variation orders in the Facilities Management segment.
From a professional standpoint, GFM’s strategic initiatives, particularly in expanding its O&G footprint and venturing into the RSA business, demonstrate a proactive approach to enhancing shareholder value. While the increase in finance costs is a point to observe, the company’s efforts to secure long-term contracts and diversify its business portfolio suggest a strong commitment to long-term stability and growth. The overall financial health remains sound, providing a good base for these expansion plans.
What are your thoughts on GFM’s latest quarterly performance and its strategic direction? Do you believe the O&G expansion and RSA ventures will significantly impact its earnings in the coming years? Share your insights and perspectives in the comments section below! Your fellow Malaysian retail investors would love to hear from you.
For more detailed analyses of other Malaysian companies, don’t forget to check out our related articles on [Related Article Link 1] and [Related Article Link 2].