Avangaad’s Q1FY25: Navigating Transitions with Strong Operational Currents and Strategic Growth
Avangaad Berhad (formerly E.A. Technique (M) Berhad), a key player in Malaysia’s marine transportation and offshore storage sector, has just released its financial results for the first quarter ending 31 December 2025 (Q1FY25). While the quarter saw a marginal year-on-year revenue dip due to contract transitions, the report highlights a robust operational performance, significant cash flow generation, and strategic moves poised to drive future growth.
Key impressive figures include a 60% surge in charter revenue from key customers, an over fivefold increase in operating cash flow, and a remarkable 138% jump in cash balance. With a secured order book of RM141.7 million, Avangaad appears to be charting a steady course despite temporary headwinds.
Core Financial Highlights: Anchoring Stability Amidst Transitions
Financial Performance Overview
Avangaad’s Q1FY25 saw a slight year-on-year revenue softness. This was primarily attributed to an anticipated transition period between the expiry of existing fast crew boat (FCB) contracts and the commencement of replacement engagements. However, it’s important to note that succession contracts for three FCBs have already begun within the current quarter, with others expected to come online in the second quarter of 2025, signaling a progressive recovery for the top line.
Q1FY25 (Reporting Period)
Secured Order Book: RM141.7 million
Optional Contracts: RM214.6 million
Cash Balance: RM45.5 million
Operating Cash Flow: RM32.03 million
Q1FY24 (Same Period Last Year)
Cash Balance: RM19.1 million
Operating Cash Flow: RM6.27 million
The Group’s proactive resolution of key outstanding matters has significantly strengthened its financial position, reflected in the substantial increase in cash balance. This improved liquidity provides Avangaad with greater financial flexibility to support ongoing operations and pursue future growth opportunities.
Segmental Strength: Charter Hire Segment Surges
A standout performance was observed in the Group’s charter hire segment. For the quarter ended 31 March 2025, this segment recorded stronger customer concentration, with three external customers contributing 68% of total Group revenue, a notable increase from 41% contributed by two customers in the corresponding period last year.
Q1FY25 (Reporting Period)
Revenue from Key Charter Customers: RM20.42 million
Year-on-Year Increase: 60.5%
Q1FY24 (Same Period Last Year)
Revenue from Key Charter Customers: RM12.72 million
This significant increase reflects growing demand and strategic traction in Avangaad’s core marine services operations, supported by sustained fleet deployment and deeper penetration in key accounts.
Strategic Growth Initiatives: Expanding Fleet and Securing Future
Looking ahead, Avangaad is actively pursuing strategic growth. The Group has proposed acquiring the marine consultancy company Bumi Jaya Shipcare Sdn. Bhd. (BJSSB) along with two tugboats for RM49.0 million. This acquisition is expected to expand Avangaad’s fleet from 26 to 31 vessels by the third quarter of 2025, significantly bolstering its service capacity and operational readiness to support regional offshore activities.
Furthermore, several newly awarded contracts are expected to contribute materially to the Group’s earnings trajectory. The longest of these contracts extends up to three years, with some offering optional extensions of an additional two years, providing long-term revenue stability.
Risk and Prospect Analysis: Charting a Course for Resilience and Growth
Despite ongoing market volatility, Avangaad has demonstrated resilience through its structured and client-centric engagement strategy. The temporary revenue dip in Q1FY25 due to contract transitions is being actively managed, with new contracts already coming online and more expected soon. This proactive approach, combined with a strong secured order book and optional contracts, provides a clear earnings visibility for the Group.
The proposed acquisition of Bumi Jaya Shipcare Sdn. Bhd. and additional tugboats is a strategic move to enhance Avangaad’s service capabilities and market positioning as a dependable and scalable marine service provider. This expansion, coupled with high committed utilisation rates and consistent demand across its deployed vessels, underpins the Group’s operational strength.
Avangaad’s Executive Director, Datuk Wira Mubarak Hussain Akhtar Husin, emphasized the Group’s strong fundamentals, solid operational cash flow, and substantial order backlog as key drivers for growth. The management’s focus remains on optimising fleet utilisation, enhancing cost efficiency, and continuously exploring new business opportunities to sustain earnings stability and cash flow certainty. The prudent capital management, reflected by no unscheduled debt or equity movements, further underscores the Group’s financial discipline.
Summary and Outlook
Avangaad Berhad’s Q1FY25 report paints a picture of a company navigating temporary challenges with strategic foresight and operational strength. While a marginal revenue decline was noted due to contract transitions, the significant increase in operating cash flow and cash balance, coupled with a robust order book, highlights the underlying health of the business.
The strategic acquisition and new long-term contracts position Avangaad for enhanced service capacity and stable revenue streams in the coming periods. The Group’s commitment to operational efficiency and prudent financial management provides a solid foundation for future growth.
Key positive factors from this financial report include:
- Over fivefold increase in operating cash flow, indicating strong operational efficiency.
- A 138% increase in cash balance, significantly improving financial flexibility.
- A substantial secured order book of RM141.7 million, providing earnings visibility.
- A 60.5% year-on-year surge in revenue from key charter customers, reflecting strong demand in core services.
- Strategic acquisition of Bumi Jaya Shipcare Sdn. Bhd. and two tugboats to expand fleet capacity.
- New long-term contracts (up to 3 years with 2-year options) ensuring future revenue stability.
Avangaad is clearly focused on scaling its marine service capabilities and maintaining strong fundamentals, with a positive outlook for contributing to earnings and net tangible assets for the financial year ending December 2025.
From a professional standpoint, Avangaad’s Q1FY25 results, despite a temporary revenue dip, showcase a resilient business model with strong operational fundamentals. The company’s proactive management of contract transitions, coupled with strategic investments and a healthy cash flow, suggests a well-managed entity poised for long-term stability in the marine services sector.
What are your thoughts on Avangaad’s strategy to expand its fleet and secure long-term contracts? Do you think the company can maintain this growth momentum in the coming years, especially with its expanded fleet and long-term contracts?
Share your views in the comment section below!
