Unitrade Industries Berhad Navigates Market Headwinds with Strategic Shifts in Q4 FY2025
Greetings, fellow investors! Today, we’re diving into the latest financial report from Unitrade Industries Berhad for its fourth quarter and full financial year ended 31 March 2025. This report offers a compelling look at how the company is adapting to a dynamic market, showcasing notable revenue growth for the full year, primarily driven by a strategic acquisition, even as it faces a challenging quarter marked by increased impairment losses. Let’s unpack the numbers and understand Unitrade’s journey ahead.
Financial Highlights: A Mixed Bag of Growth and Challenges
Unitrade’s latest report presents a nuanced picture. While the full financial year saw impressive revenue growth, the fourth quarter experienced a contraction, reflecting the company’s strategic reorientation and external pressures.
Quarterly Performance (4Q2025 vs 4Q2024)
The fourth quarter of FY2025 saw a dip in performance compared to the same period last year. Revenue experienced a noticeable decline, largely due to a strategic shift away from lower-margin products in the wholesale segment. Despite this, the company managed to improve its gross profit margin, indicating a more efficient sales mix.
4Q2025
Revenue: RM413.1 million
Gross Profit: RM21.3 million
Loss Before Tax: RM(1.2) million
Loss After Tax: RM(3.3) million
Basic/Diluted Loss Per Share: (0.4) sen
4Q2024
Revenue: RM478.1 million
Gross Profit: RM21.7 million
Profit Before Tax: RM0.4 million
Loss After Tax: RM(1.0) million
Basic/Diluted Loss Per Share: (0.2) sen
As you can see, Unitrade’s revenue for 4Q2025 decreased by 13.6% to RM413.1 million compared to RM478.1 million in 4Q2024. While gross profit saw a slight decline of 1.8% to RM21.3 million, the gross profit margin actually improved from 4.5% to 5.2%, a testament to their focus on higher-margin products. However, the quarter ended with a loss before tax of RM1.2 million, a stark contrast to the RM0.4 million profit recorded in 4Q2024. This was primarily influenced by an increase in net impairment loss on trade receivables and inventory.
Full-Year Performance (FY2025 vs FY2024)
Looking at the full financial year, Unitrade delivered strong revenue growth, largely propelled by its strategic expansion into the metal recycling segment. However, profitability was impacted by one-off factors and higher impairment charges.
FY2025
Revenue: RM1,759.0 million
Gross Profit: RM88.7 million
Loss Before Tax: RM(5.8) million
Loss After Tax: RM(7.2) million
Basic/Diluted Loss Per Share: (0.9) sen
FY2024
Revenue: RM1,613.4 million
Gross Profit: RM85.0 million
Profit Before Tax: RM26.8 million
Profit After Tax: RM22.1 million
Basic/Diluted Earnings Per Share: 1.3 sen
For the full year, Unitrade’s revenue climbed by a healthy 9.0% to RM1.8 billion, up from RM1.6 billion in FY2024. This growth was largely fueled by the significant contribution from the metal recycling segment, which accounted for 46.6% of total revenue after the acquisition of the business in January 2024. Despite the revenue growth, the Group registered a loss before tax of RM5.8 million for FY2025, a reversal from the RM26.8 million profit in FY2024. This shift was mainly due to the absence of a one-off gain from asset disposal recorded in FY2024, coupled with increased impairment charges on both inventory (RM9.1 million in FY2025 vs RM2.9 million in FY2024) and trade receivables (RM23.5 million in FY2025 vs RM12.1 million in FY2024).
Segmental Performance: A Strategic Rebalancing
Unitrade’s strategic shift is clearly visible in its segmental performance. The wholesale and distribution segment, while still the largest contributor, saw a planned reduction in lower-margin products. This was more than offset by the robust performance of the newly integrated metal recycling business.
| Segment | FY2025 Revenue (RM ‘000) | FY2024 Revenue (RM ‘000) | Change (RM ‘000) | Contribution FY2025 (%) |
|---|---|---|---|---|
| Wholesale and distribution | 897,507 | 1,366,595 | (469,088) | 51.0% |
| Metal recycling | 819,220 | 205,602 | 613,618 | 46.6% |
| Manufacturing | 22,633 | 24,942 | (2,309) | 1.3% |
| Rental | 19,686 | 16,261 | 3,425 | 1.1% |
The wholesale segment’s revenue declined by RM469.1 million, reflecting the company’s deliberate move to reduce exposure to less profitable products. This strategic pivot allowed the metal recycling segment to become a significant growth driver, contributing RM819.2 million in revenue following its successful acquisition. The rental division also showed positive momentum, indicating diversified income streams.
Financial Position: Strengthening the Balance Sheet
As of 31 March 2025, Unitrade’s balance sheet reflects ongoing efforts to manage its financial health. Total assets saw a decrease, mainly due to a reduction in trade and other receivables and inventories, which aligns with their credit and inventory management strategies. Total equity, however, increased slightly, demonstrating resilience.
Total Assets: RM1,008.9 million (31 Mar 2025) vs RM1,126.9 million (31 Mar 2024)
Total Equity: RM366.1 million (31 Mar 2025) vs RM359.4 million (31 Mar 2024)
Total Liabilities: RM642.8 million (31 Mar 2025) vs RM767.5 million (31 Mar 2024)
Net Assets Per Share: 21 sen (31 Mar 2025) vs 22 sen (31 Mar 2024)
Cash flow from operating activities improved significantly, generating RM49.0 million in FY2025, a substantial increase from RM15.6 million in FY2024. This indicates better operational efficiency in generating cash. However, the company utilized more cash in both investing and financing activities, reflecting its expansion and debt management efforts.
Risks and Prospects: Navigating the Future
Unitrade acknowledges the persistent volatility in external market conditions, influenced by geopolitical risks, trade tensions, and tariff pressures. However, the company believes it is well-insulated from direct tariff impacts given its primary sales market is Malaysia and its sourcing strategy. In response to these challenges, Unitrade is proactively implementing rigorous cost controls, strengthening credit management, and optimizing inventory to minimize losses.
The strategic shift to reduce reliance on lower-margin wholesale distribution products, coupled with the strong contributions from its metal recycling segment, is expected to sustain healthy revenue. The recent completion of the acquisition of a 51% equity interest in Kien San Metal Sdn Bhd in April 2025 is a significant move, expanding Unitrade’s national presence in metal recycling, enhancing capabilities, and strengthening its earnings base. This also reinforces its upstream position in the steel value chain, supporting the circular economy for metals.
In the wholesale distribution segment, the solar product distribution continues to be a positive contributor. Unitrade is strategically positioned to benefit from Malaysia’s ambitious renewable energy projects, including the ongoing LSS5 and LSS5+ programmes, and the upcoming LSS6 bidding round. The adoption of rooftop solar, particularly in commercial and industrial (C&I) and residential segments, also presents promising opportunities, further bolstered by initiatives like the Community Renewable Energy Aggregation Mechanism (CREAM).
Furthermore, Unitrade commenced operations at its new pipe fabrication centre in March 2025, equipped with robotic arms and an epoxy powder coating line. This facility is set to enhance end-to-end pipe services and broaden revenue streams. The rental division is also expanding its equipment portfolio to include crawler crane rentals, scissor lifts, sky lifts, and boom lifts, catering to evolving market needs.
While external challenges remain, Unitrade is actively executing strategic initiatives to improve financial health and position itself for sustainable growth as market conditions improve.
Summary and Outlook
Unitrade Industries Berhad’s latest financial report for Q4 FY2025 and the full financial year reveals a company in transition, strategically adapting to market realities. Despite facing a challenging quarter with increased impairment losses, the full year’s revenue growth is a clear indicator of the positive impact of its diversification efforts, particularly the successful integration of the metal recycling business.
The company’s proactive measures in cost control, credit management, and inventory optimization are crucial steps in navigating the current volatile environment. The expansion into metal recycling and the promising outlook for its solar product distribution, supported by national renewable energy initiatives, paint a positive picture for future revenue streams. The new pipe fabrication centre and expanded rental offerings further diversify its business model.
While the absence of one-off gains and higher impairment charges impacted the bottom line this year, Unitrade’s strategic re-alignment towards higher-margin activities and diversified business segments positions it for long-term resilience and growth. Investors should closely monitor the execution of these strategies and the performance of its new ventures.
Key points from the report:
- Full-year revenue grew by 9.0%, primarily driven by the metal recycling segment acquisition.
- The company recorded a loss for the full year due to the absence of a one-off gain from the previous year and increased impairment charges on receivables and inventory.
- Strategic shift away from lower-margin wholesale products is underway, improving gross profit margins.
- Expansion into metal recycling and solar product distribution are key growth drivers for the future.
- Proactive measures are being taken to manage costs, credit, and inventory amidst challenging market conditions.
From my perspective as a seasoned observer of the Malaysian market, Unitrade’s strategic pivot is a necessary and commendable move in a competitive landscape. The increased focus on higher-margin segments like metal recycling and renewable energy solutions demonstrates foresight and adaptability. While the short-term profitability has been impacted by one-off items and higher impairments, which are important to acknowledge, the underlying strategic direction appears sound for long-term value creation. The execution of these strategies, particularly in integrating acquisitions and capitalizing on the green energy transition, will be key to their future success.
What are your thoughts on Unitrade’s latest performance and its strategic direction? Do you think the company can maintain this growth momentum and return to profitability in the coming years? Share your insights in the comments below!
Stay tuned for more in-depth analyses of Malaysian companies!
