LTKM Berhad Navigates Challenging Waters: A Deep Dive into Q4 FY2025 and Full-Year Performance
LTKM Berhad, a familiar name to many Malaysian investors, has just released its unaudited financial results for the fourth quarter and full financial year ended 31 March 2025. This report paints a picture of a company navigating a challenging market environment, particularly within its core poultry business.
Despite a dip in overall financial performance, the company has continued its commitment to shareholder returns with a recent interim dividend payment. Let’s delve into the details to understand what’s shaping LTKM’s journey and what the future might hold.
Core Data Highlights: A Mixed Performance Picture
The latest financial report reveals a mixed performance for LTKM Berhad, influenced primarily by dynamics within its key segments.
Overall Financial Snapshot: Quarter and Full Year
Current Quarter (Q4 FY2025)
Revenue: RM51.98 million
Profit Net of Tax: RM12.61 million
Preceding Year Corresponding Quarter (Q4 FY2024)
Revenue: RM61.27 million
Profit Net of Tax: RM17.86 million
For the current quarter, LTKM’s revenue decreased by 15% and profit net of tax by 29% compared to the same quarter last year. This was largely due to a lower average selling price for eggs.
Full Financial Year (FY2025)
Revenue: RM222.07 million
Profit Net of Tax: RM48.49 million
Previous Financial Year (FY2024)
Revenue: RM257.69 million
Profit Net of Tax: RM58.57 million
The full financial year also saw a decline, with revenue down 14% and profit net of tax down 17%. While lower egg prices were a key factor, the impact was partially mitigated by higher government subsidies and, for the full year, reduced costs of major raw materials like corn and soybean.
Segmental Performance: A Closer Look
To better understand the drivers behind these figures, let’s examine the performance of each business segment. The table below summarizes the key financial metrics:
| Segment | Current Quarter (3 months ended 31 Mar 2025) | Preceding Year Corresponding Quarter (3 months ended 31 Mar 2024) | Current Year To Date (12 months ended 31 Mar 2025) | Preceding Year Corresponding Period (12 months ended 31 Mar 2024) | ||||
|---|---|---|---|---|---|---|---|---|
| Revenue (RM’000) | Result (RM’000) | Revenue (RM’000) | Result (RM’000) | Revenue (RM’000) | Result (RM’000) | Revenue (RM’000) | Result (RM’000) | |
| Poultry & related products | 50,083 | 11,693 | 59,008 | 13,370 | 212,490 | 47,621 | 248,340 | 61,286 |
| Extraction & sale of sand | 1,683 | 176 | 2,175 | (393) | 9,056 | 2,115 | 8,986 | 1,307 |
| Investment holdings | 210 | 699 | 90 | 4,534 | 520 | 2,256 | 360 | 2,251 |
| Property development | N/A | (161) | N/A | (44) | N/A | (350) | N/A | (205) |
The Poultry & Related Products segment, LTKM’s largest contributor, saw its revenue decline by 15% in the current quarter and 14% for the full financial year. This was directly linked to the lower average selling price of eggs. Consequently, segment results decreased by 13% for the quarter and 22% for the full year, despite the mitigating effects of government subsidies and lower raw material costs.
In contrast, the Extraction & Sale of Sand segment was a brighter spot, turning a loss into a profit for the current quarter with a 145% increase in segment results, and a 62% increase for the full financial year. This positive shift is primarily due to lower production costs.
The Investment Holdings segment showed a significant revenue jump, but its segment result for the current quarter decreased by 85%. For the full year, the segment result remained relatively stable (0% change). The report clarifies that current year earnings for this segment were mainly driven by higher dividends from securities investments, a shift from the previous year’s earnings which were largely derived from fair value gains on investment properties.
The Property Development segment continued to report losses, with results declining further by 265% in the current quarter and 71% for the full financial year.
Earnings Per Share (EPS) and Shareholder Returns
Basic EPS for the current quarter stood at 8.81 sen, down from 12.48 sen in the corresponding quarter last year. For the full financial year, basic EPS was 33.88 sen, compared to 40.92 sen in the previous financial year.
Despite the profit decline, LTKM Berhad demonstrated its commitment to shareholders by declaring and paying an interim single-tier dividend of 2 sen per ordinary share for the financial year ending 31 March 2025. This amounted to RM2.86 million and was paid on 28 March 2025.
Financial Health: Borrowings
The Group’s total borrowings showed a slight decrease, standing at RM60.31 million as at 31 March 2025, a marginal reduction from RM61.04 million a year ago. Furthermore, the effective average cost of borrowings also saw a slight reduction, from 5.40% to 5.34%, indicating prudent financial management.
Risk and Prospect Analysis: Navigating Future Headwinds
Looking ahead, the Board of Directors anticipates a challenging period, primarily due to the prevailing supply situation in the market. A significant upcoming factor is the government’s announcement of the removal of price control on eggs, which will take effect from 1 August 2025. This change could introduce new market dynamics and potential volatility for the poultry industry.
To mitigate these potential impacts, LTKM plans to intensify its focus on operational efficiencies and robust cost management. This proactive approach aims to buffer the company against market fluctuations and maintain profitability. The report also indicates that no material contributions are expected from other segments in the upcoming period, reinforcing the strategic focus on the core poultry business’s resilience.
Summary and
The quarter and full financial year ended 31 March 2025 presented a mixed bag for LTKM Berhad. While the core poultry segment faced headwinds from lower egg prices, leading to a decline in overall revenue and profit, the company demonstrated resilience by partially offsetting these challenges with government subsidies and improved raw material costs.
The sand extraction segment showed promising growth in earnings, and the investment holdings segment continued to contribute, albeit with a shift in its primary source of income.
Looking ahead, the removal of price controls on eggs will undoubtedly test the company’s agility. However, LTKM’s strategic emphasis on operational efficiency and cost management is a clear indication of its commitment to navigating these changes. Investors will be keen to observe how these strategies unfold in the coming quarters and if they are sufficient to maintain the company’s stability and growth trajectory in an evolving market landscape.
Key points to consider:
- The poultry segment’s performance is highly sensitive to average selling prices of eggs and raw material costs.
- Government subsidies have played a role in mitigating impacts, but the removal of price controls introduces new market dynamics.
- The sand extraction segment has shown positive earnings growth due to cost efficiencies.
- The company’s focus on operational efficiencies and cost management will be crucial in the upcoming challenging period.
Final Thoughts
LTKM Berhad’s latest report offers a candid view of its performance amidst a dynamic market. While the challenges in the poultry sector are evident, the company’s proactive stance on cost and efficiency, coupled with contributions from other segments, suggests a focused approach to future sustainability.
Given the upcoming market changes, do you think LTKM Berhad’s focus on operational efficiency and cost management will be sufficient to navigate the challenges ahead? Share your thoughts in the comments below!
