Navigating the Currents: A Deep Dive into Velocity Capital Partner Berhad’s Latest Financial Quarter
Greetings, fellow investors! Today, we’re unboxing the latest financial report from Velocity Capital Partner Berhad for their third financial quarter ended 31 March 2025 (Q3FY2025). This report offers a crucial glimpse into the company’s performance, revealing both areas of significant growth and segments facing considerable headwinds. While the individual quarter saw a notable decline in profit, the year-to-date figures present a more robust picture, buoyed by strategic disposals and a strong financial services segment. Let’s dive into the numbers and see what Velocity Capital Partner Berhad has been up to!
Core Data Highlights: A Mixed Bag of Performance
The third quarter of FY2025 has been a period of contrasting fortunes for Velocity Capital Partner Berhad. While overall revenue saw a dip, the company’s year-to-date profit before taxation (PBT) tells a story of strategic gains.
Individual Quarter Performance (Q3FY2025 vs Q3FY2024)
Q3FY2025 Revenue
RM11.1 million
Q3FY2024 Revenue
RM18.3 million
Revenue for the quarter significantly decreased by 39.0% to RM11.1 million compared to RM18.3 million in the preceding year’s corresponding quarter. This decline was primarily driven by the transportation and logistics segment, which faced intense competition and price sensitivity in the haulage service industry. The construction and property segment also saw a revenue decline due to the absence of property sales, and the “Others” segment was impacted by the absence of electric vehicle sales.
Q3FY2025 Profit Before Taxation (PBT)
RM0.8 million
Q3FY2024 Profit Before Taxation (PBT)
RM6.9 million
Profit Before Taxation (PBT) for Q3FY2025 saw an even sharper decline of 88.8%, settling at RM0.8 million from RM6.9 million in Q3FY2024. This significant drop was mainly attributed to the “Others” segment, which benefited from gains on disposal of subsidiaries and reversal of impairment losses on other receivables in the prior year’s corresponding quarter. The transportation and logistics segment also contributed to this decrease in line with its reduced revenue.
Cumulative Period Performance (9MFY2025 vs 9MFY2024)
9MFY2025 Revenue
RM38.4 million
9MFY2024 Revenue
RM54.0 million
For the nine-month period ended 31 March 2025, revenue decreased by 28.8% to RM38.4 million from RM54.0 million in the preceding year’s period. The reasons mirror the quarterly performance, with the transportation and logistics, construction and property, and “Others” segments experiencing reduced contributions.
9MFY2025 Profit Before Taxation (PBT)
RM20.6 million
9MFY2024 Profit Before Taxation (PBT)
RM17.8 million
Despite the overall revenue decline, the cumulative PBT for 9MFY2025 remarkably increased by 16.0% to RM20.6 million compared to RM17.8 million in 9MFY2024. This positive deviation is largely thanks to the “Others” segment, which saw a substantial 69.2% improvement, driven by a gain on disposal of subsidiaries of RM4.3 million and a significant reversal of impairment losses on other investments amounting to RM13.8 million. The financial services segment also played a crucial role, boosting its PBT by a notable 75.8% in line with its increased revenue.
Segmental Performance Breakdown: The Engines of Growth and Drag
| Segment | 9MFY2025 Revenue (RM’000) | 9MFY2024 Revenue (RM’000) | Change (%) | 9MFY2025 PBT (RM’000) | 9MFY2024 PBT (RM’000) | Change (%) |
|---|---|---|---|---|---|---|
| Ceramic | 5,611 | 5,836 | -3.9% | (1,337) | (873) | 53.2% |
| Construction & Property | 0 | 2,102 | -100.0% | (615) | (1,826) | -66.3% |
| Financial Services | 9,972 | 6,693 | 49.0% | 7,190 | 4,090 | 75.8% |
| Transportation & Logistics | 22,693 | 34,830 | -34.8% | (826) | 6,811 | -112.1% |
| Others | 150 | 4,515 | -96.7% | 16,202 | 9,573 | 69.2% |
The financial services segment clearly stands out as a key growth driver, benefiting from high market demand for financing. Conversely, the transportation and logistics segment faced significant challenges, turning a profit into a loss in the current period. The “Others” segment, despite a revenue decline, was a significant contributor to PBT due to strategic asset disposals and impairment reversals.
Strategic Moves and Market Outlook: Navigating Uncertainty
Velocity Capital Partner Berhad is not just reacting to market conditions; it’s actively shaping its portfolio through strategic acquisitions and disposals, while also acknowledging the broader economic landscape.
Key Strategic Developments:
- Enhanced Financial Services Reach: The approval for ‘Kod Potongan Gaji Biro Perkhidmatan Angkasa’ (Kod BPA) for Velocity Direct Sdn Bhd, a wholly-owned subsidiary, is a significant step. This payroll deduction code will facilitate repayments for various consumer and personal credits, potentially expanding the reach and efficiency of their financial services.
- Investment Banking Expansion: The acquisition of Velocity Capital Investment Bank Ltd (formerly Oasis Capital Investment Bank Ltd) for RM11.0 million signals the Group’s intent to strengthen its presence in the investment banking sector in Labuan.
- Portfolio Optimization through Disposals: The Group has been actively disposing of non-core assets. This includes the disposal of an 8.91% stake in Line Clear Express Sdn Bhd for RM13.8 million and an 85% stake in Cipta X Sdn Bhd for RM20.0 million. These disposals, particularly the latter, contributed significantly to the “Others” segment’s PBT through gains on disposal. A subsequent disposal of Hong Seng Frontier Sdn Bhd for RM45.3 million also completed post-period end, further demonstrating this strategy.
Market Outlook and Risks:
The global economic landscape remains uncertain, with concerns about a potential recession stemming from global reciprocal tariff hikes. This creates volatility in capital markets and could lead to inflationary pressures, impacting consumer purchasing power and risking economic slowdowns. While the US has initiated a 90-day tariff pause, the uncertainty persists until trade negotiations yield concrete agreements.
Despite these external pressures, Velocity Capital Partner Berhad identifies its financial services and transportation and logistics segments as core businesses. The Group acknowledges the mitigating potential of Asia’s economic dynamism and emphasizes its commitment to continuously review, adjust, and adapt its strategies to maximize operational and financial capacity.
Summary and Investment Considerations
Velocity Capital Partner Berhad’s Q3FY2025 report showcases a company actively undergoing strategic shifts. While the individual quarter’s revenue and profit faced challenges, particularly in the transportation and logistics segment due to competitive pressures, the cumulative year-to-date performance is more encouraging. The strong performance of the financial services segment, coupled with significant gains from strategic asset disposals, has bolstered the Group’s overall PBT for the nine-month period.
The Group’s proactive measures, such as expanding its financial services capabilities and optimizing its portfolio through disposals, demonstrate a clear intent to adapt to changing market dynamics. However, the prevailing global economic uncertainties and intense competition in certain core segments present ongoing challenges.
Key points to consider from this report:
- The financial services segment is a consistent performer and a key driver of profitability, showing strong growth in both revenue and PBT.
- Strategic asset disposals have significantly boosted year-to-date PBT, highlighting the Group’s ability to unlock value from its portfolio.
- The transportation and logistics segment faces significant headwinds, impacting overall revenue and profitability.
- Global economic uncertainties and competitive pressures remain key risks that the Group acknowledges and plans to navigate through adaptive strategies.
- No dividends were proposed or declared for the current financial period.
From my professional perspective, Velocity Capital Partner Berhad appears to be in a transitional phase, re-aligning its business focus and strengthening its financial health through strategic divestments and targeted growth in profitable areas like financial services. The decline in the transportation and logistics segment is certainly a point to watch, but the overall resilience shown in the year-to-date figures, especially through non-operating gains, suggests a management team making decisive moves.
What are your thoughts on Velocity Capital Partner Berhad’s latest performance? Do you believe their strategic disposals will lay a stronger foundation for future growth, or do the challenges in their core operating segments pose a significant concern? Share your insights in the comments below!
For more detailed analysis on Malaysian companies, feel free to explore our other articles.
