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Navigating the Headwinds: A Deep Dive into INSAS BERHAD’s Q3 FY2025 Performance
Greetings, fellow investors! Today, we’re taking a closer look at the latest unaudited financial report from INSAS BERHAD for its third quarter and financial period ended 31 March 2025. This report offers a compelling narrative of growth amidst a challenging global economic landscape, showcasing a remarkable surge in quarterly profit and a solid year-to-date performance. Let’s unwrap the numbers and understand what’s driving this Malaysian conglomerate.
Core Data Highlights: A Snapshot of Performance
Quarterly Performance (Q3 FY2025 vs. Q3 FY2024)
INSAS BERHAD delivered an impressive performance in the third quarter, demonstrating robust growth across key financial metrics. The company’s profit for the quarter nearly doubled compared to the same period last year, a testament to its strategic maneuvers.
Q3 FY2025
- Revenue: RM64.37 million
- Profit Before Tax (PBT): RM27.94 million
- Profit After Tax (PAT): RM22.67 million
- Basic Earnings Per Share (EPS): 3.16 sen
Q3 FY2024
- Revenue: RM61.40 million
- Profit Before Tax (PBT): RM15.20 million
- Profit After Tax (PAT): RM11.57 million
- Basic Earnings Per Share (EPS): 1.49 sen
Key Takeaways: Revenue saw a modest 5% increase, but the real highlight is the significant 84% surge in Profit Before Tax and a remarkable 96% increase in Profit After Tax. This substantial improvement in profitability for the quarter was primarily driven by higher revenue from structured finance activities and reduced unrealised losses on financial assets in the investment holding and trading division.
Year-to-Date Performance (9 Months Ended 31 March 2025 vs. 31 March 2024)
Looking at the cumulative nine-month period, the Group maintained a strong positive trajectory in profitability, even with a slight dip in overall revenue.
9 Months FY2025
- Revenue: RM151.85 million
- Profit Before Tax (PBT): RM91.34 million
- Profit After Tax (PAT): RM78.07 million
- Basic Earnings Per Share (EPS): 11.19 sen
9 Months FY2024
- Revenue: RM159.20 million
- Profit Before Tax (PBT): RM68.98 million
- Profit After Tax (PAT): RM58.59 million
- Basic Earnings Per Share (EPS): 8.08 sen
Key Takeaways: Despite a 5% decrease in revenue for the nine-month period, Profit Before Tax jumped by 32%, and Profit After Tax grew by 33%. This strong profit growth was largely attributed to a significant unrealised gain on fair value changes of financial assets in the investment holding and trading division, which swung from a loss of RM11.0 million last year to a gain of RM12.0 million this period.
Segmental Performance Breakdown
To truly understand the Group’s performance, it’s essential to look at the contributions from its various business segments:
Financial Services and Credit & Leasing Division
- Q3 FY2025 vs. Q3 FY2024: This division reported a substantial increase in revenue to RM17.8 million (from RM5.9 million) and a significant turnaround from a pre-tax loss of RM2.5 million to a pre-tax profit of RM7.9 million. This was mainly due to higher revenue generated by its structured finance unit.
- 9 Months FY2025 vs. 9 Months FY2024: Revenue for the period increased to RM46.7 million (from RM44.2 million), also driven by the structured finance unit. Pre-tax profit remained stable.
Investment Holding and Trading Division
- Q3 FY2025 vs. Q3 FY2024: Revenue increased to RM20.6 million (from RM18.3 million) due to higher trading activities. The division swung from a pre-tax loss of RM7.1 million to a pre-tax profit of RM4.8 million, benefiting from increased trading activities and a lower unrealised loss on fair value changes of financial assets.
- 9 Months FY2025 vs. 9 Months FY2024: Revenue rose to RM68.7 million (from RM62.0 million), and the division achieved a pre-tax profit of RM14.6 million (from a pre-tax loss of RM1.8 million), primarily due to a significant unrealised gain on fair value changes of financial assets.
Technology and IT-related Manufacturing, Trading and Services Division
- Q3 FY2025 vs. Q3 FY2024: This unit saw lower revenue of RM22.0 million (from RM32.3 million) and a lower pre-tax profit of RM15.8 million (from RM24.9 million). This was largely due to the absence of a gain on disposal of shares in an associate company, which contributed RM6.1 million in Q3 FY2024.
- 9 Months FY2025 vs. 9 Months FY2024: Revenue decreased to RM23.5 million (from RM33.0 million), and pre-tax profit was lower at RM62.6 million (from RM67.9 million), mainly due to a lower equity profit contribution from associate companies.
Financial Health: Balance Sheet and Cash Flow
A quick look at the Group’s financial position as of 31 March 2025, compared to 30 June 2024, reveals a stable and healthy financial standing.
| Financial Indicator | As at 31 March 2025 (RM’000) | As at 30 June 2024 (RM’000) | Change (%) |
|---|---|---|---|
| Total Assets | 3,187,805 | 3,130,144 | +1.8% |
| Total Equity | 2,641,906 | 2,615,807 | +1.0% |
| Total Liabilities | 545,899 | 514,337 | +6.1% |
| Net Assets Per Share | RM3.71 | RM3.67 | +1.1% |
The Group’s cash flow statement provides further insights into its operational efficiency and investment activities:
| Cash Flow Category | Period ended 31 March 2025 (RM’000) | Period ended 31 March 2024 (RM’000) |
|---|---|---|
| Net cash (used in)/from operating activities | (76,574) | 95,883 |
| Net cash from investing activities | 63,283 | 47,995 |
| Net cash from financing activities | 29,648 | (39,705) |
| Net increase in cash and cash equivalents | 16,357 | 104,173 |
While operating activities saw a net cash outflow, investing activities generated a higher inflow, driven by proceeds from the disposal of an investment property and shares in associate companies. Financing activities also contributed a positive cash flow, primarily from net drawdown of loans and borrowings. The overall cash and cash equivalents increased, indicating a healthy liquidity position.
Dividends: A Return to Shareholders
The Board of Directors declared an interim single tier dividend of 2.5 sen per ordinary share for the financial year ending 30 June 2025. This dividend, totaling RM16.58 million, was paid on 31 December 2024, reflecting the company’s commitment to returning value to its shareholders.
Risks and Prospects: Navigating the Future
INSAS BERHAD acknowledges the ongoing market volatility, geopolitical tensions, and trade tariffs. Despite these global uncertainties, the Board remains committed to delivering sustainable long-term value, underpinned by strong financial fundamentals and prudent management.
Overall Outlook: The Group remains vigilant to navigate the challenging economic landscape, which includes instability in global financial markets, supply chain disruptions, and dampened business and consumer confidence. Their strategy hinges on leveraging their robust financial position and adapting to market dynamics.
Segment-Specific Outlook:
- Financial Services and Credit & Leasing: The outlook for the stockbroking and corporate advisory division is cautious but positive, anticipating growth in corporate finance advisory business. New loan offerings are expected to bolster contributions from structured finance units.
- Investment Trading: Performance in this segment will largely depend on the global financial markets, which are expected to remain volatile due to geopolitical tensions and economic uncertainties.
- Technology and IT-related: Barring negative developments from escalating geopolitical uncertainties, particularly US tariffs affecting the semiconductor market, the Technology unit is expected to contribute positively. This is based on forecasts of rising demand in FY2025 from the continuous introduction of AI-capable smartphones and the growth of high-bandwidth optoelectronic devices for networks and data centers.
Summary and Outlook
INSAS BERHAD’s latest quarterly report paints a picture of a resilient company that has achieved significant profit growth in Q3 FY2025 and for the nine-month period, despite a challenging external environment. The strategic focus on financial services, investment trading, and technology appears to be yielding positive results, with key divisions demonstrating strong performance. The company’s healthy balance sheet and consistent dividend payments further underscore its stability and commitment to shareholders.
While the global economic outlook remains uncertain due to geopolitical tensions and market volatility, INSAS BERHAD’s management has articulated clear strategies and remains focused on leveraging growth opportunities, especially in the evolving technology sector with the rise of AI-capable devices. The Group’s prudent financial management and adaptability will be crucial in sustaining its momentum.
Key areas to watch going forward include:
- The performance of the Investment Holding and Trading division, which is highly sensitive to global market fluctuations.
- The sustained demand for AI-capable smartphones and optoelectronic devices, which is critical for the Technology unit’s continued positive contribution.
- The ability of the Financial Services division to continue generating higher revenue from structured finance activities.
- How the company navigates the broader macroeconomic challenges, including inflation and interest rate movements.
