Foundpac Group Berhad Navigates Market Headwinds with Strong Q3 Performance and Strategic Growth
Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial report from Foundpac Group Berhad for the period ended 31 March 2025. This report provides a fascinating look into the company’s resilience and strategic direction amidst a dynamic global economic landscape. From impressive profit growth to a newly declared dividend, there’s much to unpack. Let’s explore how Foundpac is positioning itself for continued success and what these numbers mean for its future trajectory.
Core Data Highlights: A Snapshot of Performance
Strong Q3 Performance: Quarter-on-Quarter Growth
Foundpac Group delivered a robust performance in the current quarter (Q3 FY2025), showcasing significant improvements across key financial metrics compared to the same period last year.
Current Quarter (31/03/2025)
Revenue: RM15.022 million
Profit Before Tax (PBT): RM2.621 million
Profit for the Period: RM1.657 million
Profit Attributable to Owners: RM1.905 million
Basic Earnings Per Share (EPS): 0.35 sen
Corresponding Quarter (31/03/2024)
Revenue: RM14.405 million
Profit Before Tax (PBT): RM1.660 million
Profit for the Period: RM0.810 million
Profit Attributable to Owners: RM1.331 million
Basic Earnings Per Share (EPS): 0.24 sen
The Group’s revenue for the current quarter saw a commendable increase of RM0.617 million, or 4.28%, primarily driven by higher sales from its Precision Engineering (PE) and automation segments. More impressively, the Profit Before Tax (PBT) surged by RM0.961 million, a remarkable 57.89% increase, largely due to improved margins within the cables and connectors segment. This significant improvement in profitability is a testament to the Group’s operational efficiency and strategic focus on margin enhancement.
Cumulative Growth Story: Nine Months Strong
Looking at the nine-month cumulative performance, Foundpac Group continued its positive trajectory, demonstrating consistent growth.
Current Period-To-Date (31/03/2025)
Revenue: RM47.925 million
Profit Before Tax (PBT): RM6.938 million
Profit for the Period: RM4.037 million
Profit Attributable to Owners: RM5.204 million
Basic Earnings Per Share (EPS): 0.95 sen
Corresponding Period-To-Date (31/03/2024)
Revenue: RM47.473 million
Profit Before Tax (PBT): RM5.355 million
Profit for the Period: RM3.035 million
Profit Attributable to Owners: RM4.259 million
Basic Earnings Per Share (EPS): 0.78 sen
For the financial period to-date, revenue increased by 0.95%, reaching RM47.925 million. This was mainly propelled by higher revenue from the PE segment, despite some offsets from the laser stencils and automation segments. The cumulative PBT grew by an impressive 29.56%, reaching RM6.938 million, echoing the drivers from the current quarter: strong PE performance and improved margins from cables and connectors.
Segmental and Geographical Insights
Delving deeper into the business segments, the Precision Engineering (PE) segment continues to be a cornerstone of the Group’s success, contributing significantly to both revenue and profit. The cables and connectors segment, while still reporting a loss, showed remarkable improvement in its margins, leading to a substantial reduction in its losses compared to the previous year. Conversely, the laser stencils and automation segments experienced lower revenue contributions.
Geographically, export sales remain crucial, contributing 63.71% of the Group’s total revenue for the cumulative period. Notably, sales to America saw significant growth, indicating expanding market penetration in that region. However, sales in Europe and other Asian countries experienced a decline, suggesting a need for diversified market strategies or a reflection of regional market dynamics.
Financial Health and Cash Flow
The Group’s balance sheet reflects strategic investments, with non-current assets increasing substantially, primarily due to significant acquisitions in property, plant, and equipment. This expansion was largely supported by new loans and borrowings, indicating the Group’s commitment to enhancing its operational capacity. Despite increased investment, cash and cash equivalents saw a net increase, driven by strong cash generation from operating activities, which more than offset the substantial cash used in investing activities.
Risks and Prospects: Navigating the Future
Foundpac Group acknowledges the prevailing market uncertainties, particularly those stemming from evolving United States trade policies, including abrupt changes in tariffs and foreign currency volatility. These factors can create an unpredictable operating environment. However, the Group is actively intensifying efforts to explore alternative markets, aiming to diversify its revenue streams and mitigate potential risks associated with trade policy shifts.
Despite these external challenges, the management remains cautiously optimistic. They do not foresee a significant impact that would deter them from achieving an improved performance for the current financial year, even with the impending lapse of the 90-day postponement of the 24% reciprocal tariff on Malaysian imports into the United States on 8 July 2025. This outlook suggests confidence in their operational strategies and market positioning.
Dividends: A Return to Shareholders
In a positive development for shareholders, Foundpac Group has declared a second single tier interim dividend of 1.0 sen per share for the financial year ending 30 June 2025. This dividend was declared on 20 May 2025 and is scheduled for payment on 24 June 2025 to eligible depositors. This announcement underscores the company’s commitment to returning value to its shareholders, reflecting a healthy financial position and positive outlook.
Summary and
Foundpac Group Berhad’s latest quarterly report paints a picture of a company demonstrating resilience and strategic agility. The strong performance in the current quarter, particularly the significant surge in profit before tax driven by improved margins, highlights effective operational management. While the Precision Engineering segment continues to be a powerhouse, the notable recovery in the cables and connectors segment is a positive sign. The Group’s proactive approach to expanding into new markets and its optimistic outlook despite trade policy uncertainties are encouraging.
However, like any investment, it’s crucial to consider the broader context. The decline in revenue from certain segments and geographical markets suggests areas for continued monitoring and strategic adjustments. The increase in borrowings to fund expansion also warrants attention to ensure healthy debt management moving forward.
Key points to consider:
- Strong Profit Growth: The significant increase in PBT, especially due to margin improvements in the cables and connectors segment, indicates operational efficiency.
- Strategic Investments: The substantial increase in property, plant, and equipment reflects the Group’s commitment to expanding capacity and future growth.
- Market Diversification Efforts: Proactive exploration of alternative markets is a crucial strategy to mitigate geopolitical risks.
- Shareholder Returns: The declared dividend signals confidence and a commitment to rewarding shareholders.
- External Headwinds: The ongoing uncertainties in global trade policies, particularly with the US, remain a key external factor to monitor.
It is important to reiterate that this analysis is for informational purposes only and does not constitute a recommendation to buy, sell, or hold any securities. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.
From my perspective as a financial blogger, Foundpac Group appears to be navigating a complex economic environment with a clear focus on operational efficiency and strategic expansion. The balance between investing for future growth and delivering immediate profitability is a delicate one, and Foundpac seems to be managing it well. The dividend announcement is certainly a welcome sign for retail investors, indicating a stable and shareholder-friendly approach.
What are your thoughts on Foundpac Group’s latest performance? Do you believe their strategy of exploring alternative markets will effectively cushion the impact of global trade uncertainties? Share your insights in the comments below!
