Greetings, fellow investors and market enthusiasts! Today, we’re diving into the latest financial performance of **SEACERA GROUP BERHAD** for its third quarter ended 31 March 2025. This report offers a crucial glimpse into the company’s operational health and strategic direction amidst evolving market conditions. While the headlines might suggest a challenging period, a deeper look reveals important nuances and future considerations for Malaysian retail investors.
The core takeaway from this quarter’s report is a significant shift from profit to loss, primarily driven by a substantial deferred tax asset reversal. However, it’s not all gloom; the report also touches upon the robust growth within Malaysia’s construction sector, a key area for Seacera. Let’s break down the numbers and understand what this means for the company’s journey ahead.
Q3 FY2025 Performance: A Detailed Look
SEACERA GROUP BERHAD faced headwinds in the third quarter, reporting a net loss compared to a profit in the corresponding period last year. This change was largely influenced by a non-operational accounting adjustment related to deferred tax assets.
Revenue and Profitability: A Mixed Picture
The company’s revenue for the quarter saw a notable decline, reflecting a softer period for its core trading activities. Despite this, understanding the underlying factors is key.
Current Quarter (31 March 2025)
Revenue: RM 8,271k
Gross Profit: RM 694k
Loss Before Taxation: RM (255)k
Loss Net of Tax: RM (4,790)k
Basic Loss Per Share: (0.82) sen
Corresponding Quarter Last Year (31 March 2024)
Revenue: RM 13,806k
Gross Profit: RM 1,274k
Profit Before Taxation: RM 528k
Profit Net of Tax: RM 516k
Basic Earnings Per Share: 0.08 sen
Revenue for the current quarter decreased by approximately 40% to RM 8.27 million from RM 13.81 million in the same quarter last year. This was primarily attributed to lower revenue from the trading of building materials. Consequently, gross profit also saw a significant reduction.
The most impactful change was the swing from a profit before taxation of RM 528k last year to a loss before taxation of RM (255)k this quarter. This negative trend deepened to a net loss of RM (4.79) million, largely due to a substantial reversal of deferred tax assets recognized in prior years. This accounting adjustment significantly impacted the bottom line for the quarter.
Year-to-Date Performance
Looking at the cumulative performance over the nine months provides a broader perspective on the company’s trajectory.
Year-to-Date (31 March 2025)
Revenue: RM 28,291k
Gross Profit: RM 2,311k
Profit Before Taxation: RM 124k
Loss Net of Tax: RM (4,411)k
Basic Loss Per Share: (0.74) sen
Year-to-Date Last Year (31 March 2024)
Revenue: RM 42,208k
Gross Profit: RM 5,810k
Profit Before Taxation: RM 3,134k
Profit Net of Tax: RM 3,122k
Basic Earnings Per Share: 0.50 sen
On a year-to-date basis, revenue declined by about 33% to RM 28.29 million from RM 42.21 million. The company reported a cumulative net loss of RM (4.41) million for the nine months, a stark contrast to the RM 3.12 million profit recorded in the same period last year. Again, the deferred tax asset reversal was a key factor in this reversal.
Segmental Insights: Trading and Property/Construction
Seacera’s operations are primarily segmented into Trading (building materials) and Property/Construction (property investment, development, and construction). For the financial period ended 31 March 2025:
| Segment | Revenue (RM’000) | Operating Profit/(Loss) (RM’000) |
|---|---|---|
| Trading | 27,403 | 1,015 |
| Property/Construction | 885 | (413) |
| Others (Investment Holding, Money Lending) | – | 14,042 |
| Elimination | 3 | (14,510) |
| Consolidated | 28,291 | 134 |
The Trading segment remains the primary revenue driver, while the “Others” segment shows a significant operating profit which is largely offset by elimination adjustments at the consolidated level. The Property/Construction segment recorded an operating loss.
Financial Position and Cash Flow
The balance sheet shows a stable asset base, while cash flow from operations reflects the challenging quarter.
As at 31 March 2025, total assets stood at RM 847.58 million, slightly down from RM 853.28 million as at 30 June 2024. Total equity remained robust at RM 716.41 million, with net assets per share holding steady at RM 1.15.
Cash flows from operating activities saw a net outflow of RM (6.45) million for the nine-month period, a reversal from a net inflow of RM 626k in the prior year. This indicates that the company’s core operations consumed cash during this period. However, investing activities generated a significant RM 4.02 million, boosted by proceeds from the disposal of an asset held for sale and dilution of interest in a subsidiary. Despite this, cash and bank balances decreased to RM 1.23 million from RM 3.69 million at the beginning of the year.
Risks and Prospects: Navigating the Landscape
SEACERA’s future performance is intrinsically linked to the health of Malaysia’s construction sector. The good news is that the sector recorded robust growth of 16.6% in Q1 2025, with a total work value of RM 42.9 billion. This growth, driven by residential buildings, non-residential buildings, and special trade activities, signals strong demand for building materials – a positive for Seacera’s core trading business.
Furthermore, the increasing awareness around Environmental, Social, and Governance (ESG) factors and sustainability is accelerating the shift towards energy-efficient and recyclable materials. This evolving trend presents potential market expansion opportunities for companies like Seacera that can adapt and cater to this demand.
However, the company remains cautious, acknowledging a “volatile pricing environment, ongoing macroeconomic uncertainties, and geopolitical developments” that could impact the broader construction and materials industry. These factors introduce a degree of unpredictability into the business outlook.
A critical point highlighted in the report is the status of material litigation. Specifically, a winding-up order was granted against the company on 28 May 2025, relating to a claim of RM 368,190.74. The company is in the process of applying for a stay of this order. This is a significant development that warrants close attention from investors, as it could have material implications if not successfully resolved.
Summary and Key Considerations
SEACERA GROUP BERHAD’s third-quarter results reflect a challenging period, primarily due to a significant deferred tax asset reversal that impacted the bottom line. While revenue from trading activities saw a decline, the underlying Malaysian construction sector shows promising growth, which could provide a tailwind for the company’s core business in the future. The company’s strategic focus on building materials positions it to potentially benefit from increased construction activity and the growing demand for sustainable materials.
However, investors should be mindful of the current macroeconomic uncertainties and, more importantly, the recent winding-up order. While the company is seeking a stay, this legal development introduces a notable risk factor that requires careful monitoring.
Key risk points for consideration include:
- The significant net loss for the quarter and year-to-date, primarily due to the deferred tax asset reversal.
- The decline in revenue from the core trading of building materials.
- The volatile pricing environment and broader macroeconomic uncertainties affecting the industry.
- The recent winding-up order granted against the company and the ongoing legal process to seek a stay.
From my perspective as a blogger observing the Malaysian market, Seacera’s report underscores the importance of looking beyond just the headline numbers. The deferred tax asset reversal is an accounting adjustment, but the operational decline in revenue and the cash outflow from operations are tangible. The positive industry tailwinds in construction are encouraging, but the material litigation, particularly the winding-up order, is a serious concern that demands investor vigilance. The company’s ability to successfully navigate this legal challenge will be crucial for its near-term stability.
Do you think SEACERA GROUP BERHAD can leverage the construction sector’s growth to overcome its recent challenges and the impact of the winding-up order? Share your thoughts in the comments below!
