Ever wondered how Malaysian companies navigate the intricate currents of global economic shifts? Today, we’re diving into the latest financial disclosures from SPRING ART HOLDINGS BERHAD, a prominent Malaysian furniture manufacturer, as they unveil their performance for the first quarter ended 31 March 2025 (Q1 2025).
This report offers a fascinating glimpse into the company’s operational landscape, revealing a period marked by both challenges and strategic resilience. While revenue experienced a dip compared to the same period last year, the Group’s sequential performance shows a rebound, and importantly, a first interim dividend of 0.7 sen per ordinary share has been declared for the financial year ending 31 December 2025. Let’s unpack the details and see what this means for SPRING’s journey ahead.
A Look at the Numbers: Q1 2025 Performance
SPRING’s Q1 2025 results reflect a challenging environment when compared to the same period last year. The Group reported a noticeable decline in its top and bottom lines. Let’s break down the key figures:
Q1 2025
Revenue: RM11.62 million
Pre-Tax Profit (PBT): RM0.073 million
Net Profit (Attributable to Owners): RM0.166 million
Basic Earnings Per Share (EPS): 0.04 sen
Q1 2024 (Same Period Last Year)
Revenue: RM14.788 million
Pre-Tax Profit (PBT): RM3.830 million
Net Profit (Attributable to Owners): RM3.001 million
Basic Earnings Per Share (EPS): 0.72 sen
The Group’s revenue for Q1 2025 stood at RM11.62 million, marking a 21.4% decrease compared to RM14.788 million in Q1 2024. This was primarily influenced by softer demand from the Middle East, a key market for SPRING, which impacted overall consumer spending, particularly in discretionary categories like furniture. The report also highlights uncertainty over potential US reciprocal tariffs as a factor making consumers more cautious.
The impact on profitability was even more pronounced, with Pre-Tax Profit (PBT) plummeting by 98.1%, from RM3.83 million in Q1 2024 to a mere RM0.073 million in Q1 2025. The depreciation of the US Dollar against the Malaysian Ringgit played a significant role here, reducing earnings from foreign sales when converted. Additionally, a shorter working period due to the Chinese New Year and Hari Raya celebrations also contributed to the decline.
Despite the sharp decline in PBT, the Group recorded a Net Profit of RM0.166 million, down from RM3.001 million in Q1 2024. This was aided by a tax credit of RM0.093 million during the quarter, compared to a tax expense of RM0.829 million in the prior year’s corresponding quarter. Consequently, Basic Earnings Per Share (EPS) also saw a significant reduction from 0.72 sen to 0.04 sen.
Sequential Growth: Q1 2025 vs Q4 2024
While the year-on-year comparison shows a contraction, looking at the immediate preceding quarter (Q4 2024) reveals a different story for revenue:
Q1 2025
Revenue: RM11.62 million
Pre-Tax Profit (PBT): RM0.073 million
Q4 2024 (Immediate Preceding Quarter)
Revenue: RM9.298 million
Pre-Tax Profit (PBT): RM0.677 million
Compared to Q4 2024, SPRING’s Q1 2025 revenue actually increased by 25.0%, from RM9.298 million to RM11.62 million. This sequential improvement was primarily driven by higher demand for bedroom and living room furniture from customers in the Middle East, North America, and Latin America.
However, the PBT for Q1 2025 decreased by 89.2% compared to Q4 2024. This was mainly attributed to higher depreciation of property, plant, and equipment, as well as increased spending on advertising, exhibition costs, and other operational expenses.
Geographical Revenue Snapshot
The report also provides a breakdown of revenue by geographical segments, highlighting shifts in market demand:
| Region | Q1 2025 (RM’000) | Q1 2024 (RM’000) | Change (%) |
|---|---|---|---|
| Middle East | 9,314 | 11,555 | -19.4% |
| Asia Pacific | 1,000 | 786 | +27.2% |
| North America and Latin America | 681 | 1,994 | -65.8% |
| Europe | 625 | 347 | +80.1% |
| Africa | – | 106 | -100% |
| Total | 11,620 | 14,788 | -21.4% |
The data clearly illustrates the impact of softer demand from the Middle East and a significant drop from North America and Latin America on the overall revenue decline. Conversely, Asia Pacific and Europe showed positive growth, indicating diversified market opportunities.
Financial Health Check
As of 31 March 2025, SPRING’s total borrowings increased to RM16.305 million from RM14.716 million as at 31 March 2024. These borrowings are secured and denominated in Ringgit Malaysia. The Group also has contingent liabilities of RM16.305 million in corporate guarantees for credit facilities granted to its subsidiaries.
On a positive note, capital commitments for the purchase of property, plant, and equipment significantly decreased to RM0.236 million from RM1.254 million in the prior year, suggesting a more conservative approach to capital expenditure.
The Group continues to utilize foreign currency forward contracts to hedge its exposure to foreign exchange fluctuations arising from sales, recognizing a fair value gain of RM0.064 million from these instruments in Q1 2025, compared to a loss of RM0.008 million in Q1 2024. This indicates effective hedging strategies in a volatile currency environment.
Navigating Headwinds and Charting Future Growth
SPRING acknowledges the challenges ahead, particularly external factors such as the uncertainty surrounding potential US reciprocal tariffs, which could introduce volatility into the global economic environment and impact trade dynamics and consumer demand. However, the Group remains proactive in its strategies to mitigate these risks and drive long-term growth.
The company is committed to strengthening its position in the global furniture market through operational excellence and innovation. Key transformation initiatives include:
- Increasing production efficiency.
- Enhancing and refining product offerings to better meet customer needs.
- Advancing automation for greater precision and scalability.
To expand its market presence, SPRING plans to participate in international trade fairs, introduce innovative designs, and pursue new sales opportunities to attract and retain customers. The Board emphasizes a dedication to strategic and prudent decisions, working closely with customers to streamline orders, optimize costs, expand the customer base, and maximize workforce efficiency. The primary objective for the financial year ending 31 December 2025 remains focused on strengthening financial performance and driving sustainable growth.
Summary and
SPRING’s Q1 2025 report paints a picture of a company facing significant headwinds, particularly when viewed on a year-on-year basis, largely due to external market conditions and currency fluctuations. The substantial drop in Pre-Tax Profit highlights the immediate impact of these factors. However, the sequential revenue growth from Q4 2024 to Q1 2025 offers a glimmer of a potential rebound in demand from key markets.
The declaration of a first interim dividend of 0.7 sen per ordinary share is a positive signal, demonstrating the Board’s commitment to returning value to shareholders despite the challenging quarter. The Group’s proactive strategies focusing on operational efficiency, product innovation, market expansion, and prudent financial management are crucial steps in navigating the current landscape.
Key points to consider moving forward include:
- The continued softness in global consumer demand, particularly from the Middle East and North America, which remains a primary concern for revenue stability.
- The impact of US Dollar depreciation against the Malaysian Ringgit on converted foreign sales earnings.
- The uncertainty surrounding potential US reciprocal tariffs and their broad implications on international trade and consumer confidence.
- The effectiveness of the Group’s cost-saving measures and efficiency improvements in offsetting higher operational expenses and depreciation.
- The ability of new product designs and participation in trade fairs to effectively expand the customer base and drive sales growth.
The Group’s commitment to strengthening its business fundamentals and adapting strategies for sustainable growth will be vital in the coming quarters.
SPRING ART HOLDINGS BERHAD is clearly at a critical juncture, navigating a complex global economic environment. While the Q1 2025 results show the immediate pressures, the company’s strategic initiatives and dividend declaration suggest a proactive approach to long-term stability and growth. The focus on operational excellence, product innovation, and market diversification will be key to their success.
What are your thoughts on SPRING’s ability to navigate these challenges and sustain its growth trajectory in the coming years? Share your insights in the comments below!
