Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial performance of Harrisons Holdings (Malaysia) Berhad for the first quarter ended 31 March 2025. This report offers a glimpse into the company’s journey through the dynamic Malaysian economic landscape, revealing areas of resilience alongside some notable challenges.
While the company managed to post a slight increase in revenue, the quarter saw a dip in profitability, signaling the impact of rising operational costs and market shifts. Despite these headwinds, Harrisons Holdings continues to navigate its core businesses, with strategic focus areas showing promising signs. Let’s unpack the numbers and see what this means for the company’s trajectory.
Q1 2025 Financial Highlights: A Mixed Bag
Harrisons Holdings reported a modest revenue increase for the first quarter of 2025 compared to the same period last year. However, this top-line growth was met with a decline in profitability, primarily due to increased administrative expenses and softer margins.
Q1 2025 Performance
Revenue: RM624,498,000
Profit Before Tax (PBT): RM17,872,000
Profit After Tax (PAT): RM13,483,000
Profit Attributable to Ordinary Equity Holders: RM13,397,000
Earnings Per Share (EPS): 3.91 sen
Compared to Q1 2024
Revenue: RM621,151,000 (0.54% increase)
Profit Before Tax (PBT): RM19,601,000 (8.82% decrease)
Profit After Tax (PAT): RM14,897,000 (9.49% decrease)
Profit Attributable to Ordinary Equity Holders: RM14,973,000 (10.53% decrease)
Earnings Per Share (EPS): 4.37 sen
The slight increase in revenue by RM3.35 million was mainly driven by higher sales from the company’s main agencies within its Fast-Moving Consumer Products Division. However, the 8.82% drop in Profit Before Tax is attributed to a few key factors:
- A slight decrease in Gross Profit Margin from 10.54% to 10.51%, coupled with an increase of RM231,000 in inventories written off.
- A significant increase of RM2.28 million in administrative expenses, primarily due to the implementation of higher minimum wages starting February 2025.
- A provision for fair value loss on financial assets at Fair Value Through Profit or Loss (FVTPL) of RM184,000, reflecting the decline in the local stock market affecting the company’s unit trusts.
Segmental Performance: A Closer Look
Harrisons Holdings operates across three main segments: Trading and Distribution, Retailing, and Shipping and Others. Each segment presented a unique performance story this quarter.
| Segment | Revenue (RM’000) – Q1 2025 | Revenue (RM’000) – Q1 2024 | Change (RM’000) | Growth (%) |
|---|---|---|---|---|
| Trading and Distribution | 612,004 | 608,827 | 3,177 | 0.52% |
| Retailing | 8,882 | 8,369 | 513 | 6.13% |
| Shipping and Others | 3,612 | 3,955 | (343) | -8.67% |
| Total Group Revenue | 624,498 | 621,151 | 3,347 | 0.54% |
Trading and Distribution Segment
This segment, which accounts for approximately 98% of the Group’s revenue, saw a modest revenue increase of 0.52%. The Fast-Moving Consumer Products (FMCG) division was the primary driver, with sales growing by RM16.12 million or 3.35%. However, this was partially offset by a 13.47% decrease in Building Materials and Engineering Products sales, mainly due to softer demand and delivery delays caused by the Raya festivals. Industrial and Agriculture Chemicals Products, on the other hand, experienced a healthy 19.02% increase in sales, driven by picking demand in Sabah.
Despite the revenue growth, the segment’s Profit Before Interest and Tax (PBIT) decreased by 5.87%, from RM19.88 million in Q1 2024 to RM18.71 million in Q1 2025. This was largely due to slightly lower margins and the impact of the increased minimum wage.
Retailing Segment
The Retailing segment, which includes the Famous Amos Cookies business in Singapore, showed strong performance. Revenue increased by 6.13%, leading to a significant turnaround in profitability. The segment moved from a Loss Before Interest and Tax of RM287,000 in Q1 2024 to a Profit Before Interest and Tax of RM418,000 in Q1 2025. This improvement is attributed to higher sales of Famous Amos cookies and better gross profit margins, particularly during the festive seasons.
Shipping and Others Segment
This segment experienced a decline in both revenue and profitability. Revenue decreased by 8.67% due to lower commissions from shipping agency fees, container storage, handling, and shipping documentation in Sabah. The PBIT for this segment dropped by a substantial 57.65%, further impacted by a higher provision for fair value loss on financial assets at FVTPL (RM184,000 in Q1 2025 compared to RM40,000 in Q1 2024).
Financial Health Overview
As of 31 March 2025, the Group’s total assets stood at RM1,015,861,000, an increase from RM948,596,000 in the same period last year. Total liabilities also increased to RM538,979,000 from RM478,497,000. The Group’s total borrowings amounted to RM197,010,000, predominantly short-term unsecured Bankers’ Acceptance, which is up from RM165,599,000 in Q1 2024. The company maintains a healthy trade receivables position, with a significant portion (RM343,247,000) neither past due nor impaired.
Prospects and Challenges Ahead
Looking ahead, Harrisons Holdings operates within an economic environment that is expected to grow, with Malaysia’s GDP forecast to increase by 4.1% in 2025. This resilient domestic demand in both private and public sectors bodes well for the company’s core businesses, which are anticipated to grow in tandem with the national economy.
However, the report highlights several key challenges, particularly for the Fast-Moving Consumer Products (FMCG) division. These include subdued consumer sentiment, the persistent issue of parallel imports offering lower selling prices, and increasing competition with new players entering the East Malaysian market. The management acknowledges these hurdles and emphasizes its commitment to working closely with major principals to navigate these complexities.
Despite the immediate challenges, the company expresses confidence in its long-term growth trajectory, assuming no unforeseen circumstances arise. This suggests a strategic focus on adapting to market dynamics while leveraging its established distribution networks and principal relationships.
Summary and
Harrisons Holdings (Malaysia) Berhad’s Q1 2025 report paints a picture of a company facing a mixed environment. While revenue saw a slight uptick, primarily driven by its dominant Fast-Moving Consumer Products segment, profitability was impacted by rising operational costs, notably minimum wage increases, and some market-related adjustments to financial assets. The retailing segment, particularly Famous Amos, showed strong recovery and improved margins, which is a positive sign of diversification within the group.
However, the challenges in the Building Materials and Engineering Products division, coupled with a decline in the Shipping and Others segment, indicate areas requiring close monitoring. The increase in borrowings, while mostly short-term, is also a point to observe in future reports.
Key points to consider from this report:
- The Fast-Moving Consumer Products division remains the core revenue driver, but faces market-specific challenges.
- Rising operating costs, particularly minimum wages, are directly impacting profit margins across segments.
- The retailing segment demonstrates resilience and potential for growth, contributing positively to overall profitability.
- External factors like subdued consumer sentiment and increased competition are significant headwinds for the FMCG business.
- The company’s strategy focuses on strong principal relationships to navigate market challenges.
The company’s outlook for the current year remains cautiously optimistic, aligning its growth prospects with Malaysia’s overall economic expansion. While the short-term profit dip is a concern, the underlying resilience of its core businesses and strategic measures to address market challenges are notable.
From a professional standpoint, it’s clear that Harrisons Holdings is adapting to a more challenging operational environment. The slight decline in gross profit margin, coupled with significant increases in administrative expenses, underscores the pressure on profitability. However, the strong performance of the Retailing segment, especially Famous Amos, showcases the benefits of a diversified portfolio and the ability to capitalize on specific market opportunities. The focus on working closely with principals is a crucial strategy to maintain market share and navigate competitive pressures in the FMCG space. The company’s financial health, while showing increased liabilities, appears manageable given its asset base and operational cash flow dynamics.
What are your thoughts on Harrisons Holdings’ performance this quarter? Do you believe their strategies are sufficient to overcome the highlighted market challenges and maintain their long-term growth trajectory? Share your insights in the comments below!
