Navigating Headwinds: A Closer Look at ROHAS TECNIC BERHAD’s Q1 2025 Performance
The latest financial report from ROHAS TECNIC BERHAD for the first quarter ended 31 March 2025 paints a challenging picture, reflecting the difficult operating environment faced by the Malaysian engineering and construction sector. While the company navigates significant headwinds, including project delays and cost pressures, its strategic focus on market positioning and future opportunities remains a key area of attention.
This report reveals a substantial decline in revenue and a shift from profit to loss compared to the same period last year, highlighting the immediate challenges. However, a deeper dive into the numbers and management’s commentary provides a more nuanced understanding of the company’s current standing and its path forward.
Core Financial Highlights: A Challenging Quarter
ROHAS TECNIC BERHAD’s first quarter of 2025 saw a significant contraction across key financial metrics when compared to the corresponding period last year. The decline is attributed by the company to project delays and persistent cost pressures, particularly in its construction and water-related ventures.
Q1 2025
Revenue: RM52,151k
Operating Profit/(Loss): RM(2,745)k
Profit Before Tax: RM(3,076)k
Profit After Tax: RM(2,896)k
Earnings per Share: (0.54) sen
Q1 2024
Revenue: RM86,380k
Operating Profit: RM2,684k
Profit Before Tax: RM1,192k
Profit After Tax: RM233k
Earnings per Share: 0.12 sen
This translates to a 40% reduction in revenue, a 202% decline in operating results (shifting from a profit to a loss), and a staggering 1343% decrease in profit after tax compared to the same period last year. The negative earnings per share of (0.54) sen further underscores the quarter’s challenging performance.
Segmental Performance: Mixed Signals
A closer look at the business segments reveals varying degrees of impact from the prevailing challenges:
| Segment | Q1 2025 (RM’000) | Q1 2024 (RM’000) | Variance (%) |
|---|---|---|---|
| Tower Fabrication (Power Transmission) | 19,606 | 27,272 | -28% |
| Tower Fabrication (Telecommunication) | 333 | 9,647 | -97% |
| EPCC (Engineering, Procurement, Construction and Commissioning) | 26,266 | 46,884 | -44% |
| Concession and Other Business Activities | 5,946 | 2,577 | +131% |
While most segments experienced a significant downturn, particularly telecommunication tower fabrication and EPCC, the “Concession and Other Business Activities” segment showed remarkable growth of 131%, providing a silver lining amidst the overall decline.
Financial Health: Balance Sheet and Cash Flow
Comparing the financial position as at 31 March 2025 against 31 December 2024, the company’s total assets saw a slight decrease from RM647.88 million to RM632.08 million. Total equity also dipped from RM352.17 million to RM347.23 million, reflecting the quarterly loss.
From a liquidity perspective, cash and bank balances, deposits, and short-term placements saw a modest increase from RM90.89 million to RM92.60 million. However, net cash flow from operating activities turned negative at RM(14.26) million for the quarter, compared to a positive RM1.96 million in the same period last year, indicating pressure on operational cash generation.
Total group borrowings increased from RM132.54 million as at 31 December 2024 to RM144.50 million as at 31 March 2025, suggesting increased reliance on debt financing. It’s also worth noting the disposal of a 30% equity interest in Phu My Vinh Construction and Investment Corporation (PMV) for approximately RM84.64 million subsequent to the quarter-end, which could positively impact future cash flow and liquidity.
Risks and Prospects: Navigating the Future
ROHAS TECNIC BERHAD acknowledges the challenging start to the year, primarily due to project delays and cost pressures influenced by external factors. In response, the management is implementing targeted measures to bolster operational resilience and navigate these headwinds.
The company highlights several strategic opportunities that could drive future growth:
- Tenaga Nasional Berhad’s Capital Expenditure: Rohas is well-positioned to benefit from TNB’s increased capital expenditure under Regulatory Period 4 (2025–2027). This is a significant tailwind given Rohas’s strong track record in power transmission and high-voltage EPCC projects.
- Rising Electricity Demand: The expansion of data centers is driving up electricity demand, which in turn fuels the need for grid upgrades and infrastructure development. This trend aligns perfectly with Rohas’s core competencies in EPCC services for power transmission.
- Operational Streamlining: In the manufacturing segment, efforts are underway to streamline operations and secure new orders, aiming to reinforce market position despite competitive pressures.
- Cost Optimization: The company is committed to a disciplined bidding approach and focusing on cost optimization to safeguard profit margins amidst a challenging landscape.
While the immediate outlook is clouded by current project delays and cost pressures, the company’s strategic alignment with national infrastructure initiatives and its focus on operational efficiency provide a clear roadmap for future development.
Summary and
ROHAS TECNIC BERHAD’s Q1 2025 results reflect a difficult period, marked by significant revenue decline and a shift to a net loss. The performance was largely impacted by external factors leading to project delays and increased cost pressures. However, the company is actively implementing strategies to enhance operational resilience, optimize costs, and secure new orders, particularly in its manufacturing segment.
Looking ahead, the long-term prospects appear more promising, with the company strategically positioned to capitalize on Tenaga Nasional Berhad’s substantial capital expenditure plans and the growing demand for electricity infrastructure driven by data center expansion. These macro trends align well with Rohas’s expertise in transmission tower fabrication and high-voltage EPCC projects.
Key risk points to monitor include:
- The continued impact of project delays and external factors on operational timelines and revenue recognition.
- The effectiveness of cost optimization and operational streamlining measures in improving profitability.
- Competitive pressures within the industry that could further impact margins.
- The company’s ability to convert future opportunities from TNB’s capital expenditure and data center growth into tangible projects and revenue.
Despite the challenging quarter, the management’s focus on strategic initiatives and long-term growth drivers indicates a proactive approach to navigate the current headwinds and position the company for future recovery.
What Are Your Thoughts?
The Q1 2025 report for ROHAS TECNIC BERHAD clearly reflects a period of significant operational challenges. While the financial figures show a notable downturn, the management’s proactive stance in implementing cost optimization and operational streamlining measures, coupled with their focus on long-term growth drivers like TNB’s capital expenditure and data center demand, suggests a strategic approach to navigate these headwinds.
Given the current market volatility and project-specific delays, do you believe ROHAS TECNIC BERHAD’s strategies are robust enough to return to profitability and sustained growth in the coming quarters? Share your thoughts in the comments below!
For more insights into Malaysia’s infrastructure sector and other company analyses, check out our recent articles.
