Greetings, fellow investors and market enthusiasts! PROPEL GLOBAL BERHAD (PGB) has just unveiled its unaudited results for the third quarter ended 31 March 2025, and it presents a mixed bag of performance amidst a dynamic economic landscape. While the company saw a significant decrease in revenue for the quarter and cumulative nine-month period, there’s a notable narrowing of its quarterly loss before tax, signalling some internal improvements.
This report highlights PGB’s strategic navigation through challenging market conditions, focusing on diversification and operational efficiency. Let’s dive into the numbers and understand what’s driving PGB’s journey.
Financial Performance: A Closer Look
PGB’s latest financial report reveals a period of adjustment and strategic recalibration. Here’s a breakdown of the key figures:
Current Quarter Performance (3 months ended 31 March 2025 vs. 3 months ended 31 March 2024)
For the current quarter, PGB recorded a revenue of RM23.6 million, a notable decrease from RM65.8 million in the same period last year. However, the company successfully narrowed its loss before tax (LBT) from RM2.1 million to RM0.9 million, indicating improved cost management or reduced operational headwinds.
3 months ended 31 March 2025
Revenue: RM23,585k
Loss Before Tax: RM(883)k
Loss for the period: RM(1,314)k
Basic Loss Per Share: (0.19) sen
3 months ended 31 March 2024
Revenue: RM65,847k
Loss Before Tax: RM(2,148)k
Loss for the period: RM(2,716)k
Basic Loss Per Share: (0.44) sen
Cumulative Performance (9 months ended 31 March 2025 vs. 9 months ended 31 March 2024)
Looking at the cumulative nine-month period, revenue stood at RM86.3 million, down from RM128.6 million. The LBT widened significantly to RM6.4 million, compared to RM0.3 million in the previous corresponding period. This indicates that while the current quarter showed some improvement in loss narrowing, the overall nine-month trend still reflects substantial challenges.
9 months ended 31 March 2025
Revenue: RM86,251k
Loss Before Tax: RM(6,414)k
Loss for the period: RM(8,510)k
Basic Loss Per Share: (1.27) sen
9 months ended 31 March 2024
Revenue: RM128,555k
Loss Before Tax: RM(349)k
Loss for the period: RM(1,733)k
Basic Loss Per Share: (0.33) sen
Current Quarter vs. Immediate Preceding Quarter (3 months ended 31 March 2025 vs. 3 months ended 31 December 2024)
Comparing the current quarter to the immediate preceding quarter, revenue decreased by 16.6% from RM28.3 million to RM23.6 million. However, the LBT narrowed from RM1.5 million to RM0.9 million, primarily due to the absence of a RM1.7 million provision for Liquidated Ascertained Damages (LAD) from construction projects in the current quarter.
3 months ended 31 March 2025
Revenue: RM23,585k
Loss Before Tax: RM(883)k
3 months ended 31 December 2024
Revenue: RM28,337k
Loss Before Tax: RM(1,515)k
Diving Deeper: Segmental Performance
PGB operates across several key segments, each contributing to its overall performance:
Oil & Gas (O&G) Segment
The O&G segment’s revenue and profit before tax (PBT) saw a decline in both the current quarter and cumulative nine-month period compared to the previous year. This was mainly due to lower radial cutting torch services and a reduction in Engineering, Procurement, Construction & Commissioning (EPCC) projects. For the nine-month period, the absence of production chemicals income, following the disposal of a subsidiary in the third quarter of the previous financial year, also contributed to the lower revenue.
Technical Services (TS) Segment
The TS segment experienced a sharp fall in revenue and a shift from profit to loss for the cumulative nine-month period. This was primarily attributed to fewer new projects and reduced progress claims from construction work activities as major construction projects were completed. A significant provision of RM1.8 million for Liquidated Ascertained Damages (LAD) also impacted the nine-month performance.
Information and Communications Technology (ICT) Segment
While the ICT segment recorded lower revenue and PBT in the current quarter due to a reduction of one-off service revenue, it showed significant growth in the cumulative nine-month period. This segment was relatively new in the previous corresponding period (only four months of performance), making direct comparisons challenging, but its overall expansion in the current financial year is a positive sign for PGB’s diversification efforts.
Other Segment
The ‘Other’ segment, primarily comprising corporate administrative expenses, reported a narrowed loss in the current quarter due to the absence of share-based payment charges and a bad debt recovery. However, the cumulative nine-month loss widened, as the previous year benefited from one-off gains from the disposal of an investment in a subsidiary and investment properties.
Financial Health and Cash Flow
PGB’s balance sheet as at 31 March 2025 shows total assets at RM176.4 million, down from RM206.9 million as at 30 June 2024. Total equity also decreased to RM98.7 million from RM107.0 million, bringing down the net assets per share to 13.66 sen from 17.71 sen. On a positive note, current liabilities saw a significant reduction from RM80.2 million to RM50.9 million, indicating improved short-term liquidity management. Total borrowings increased to RM23.1 million from RM15.2 million.
Cash flow from operating activities for the nine-month period shifted from a positive RM9.4 million to a negative RM24.1 million, which is a concern. However, investing activities turned positive, generating RM5.4 million compared to a usage of RM7.9 million previously, partly due to proceeds from asset disposal. Financing activities also generated positive cash flow of RM11.3 million, mainly from the drawdown of loans and issuance of shares through a private placement. Overall, cash and cash equivalents at the end of the period decreased to RM9.3 million from RM20.3 million.
Key Financial Indicators (as at 31 March 2025 vs. 30 June 2024)
| Indicator | 31 March 2025 (RM’000) | 30 June 2024 (RM’000) |
|---|---|---|
| Total Assets | 176,405 | 206,889 |
| Total Equity | 98,663 | 107,000 |
| Net Assets per Share (sen) | 13.66 | 17.71 |
| Current Liabilities | 50,882 | 80,178 |
| Total Borrowings | 23,070 | 15,237 |
Prospects and Strategic Direction
Despite the current challenges, PGB remains cautiously optimistic about its future. The company is actively monitoring the global economic landscape, especially with geopolitical tensions and potential shifts in trade policies. However, Malaysia’s economic outlook remains positive, with projected GDP growth and robust domestic consumption, supported by government initiatives and multi-year infrastructure projects.
PGB is strategically positioning itself to capitalize on opportunities in its core segments:
- Oil & Gas: PGB continues to monitor Petronas’ capital expenditure and sees opportunities in maintenance, construction, and modification (MCM) services, especially after increasing its stake in Best Wide Engineering Sdn. Bhd. (BWE).
- HVAC: The Heating, Ventilation, and Air Conditioning (HVAC) industry is on a strong growth trajectory. Aligned with Malaysia’s National Energy Transition Roadmap (NETR) and the potential introduction of a carbon tax, PGB is committed to expanding its sustainable HVAC solutions, driving demand across various industries.
- ICT: The Group is expanding its ICT-related offerings, including hardware, software, and digital services, to tap into Malaysia’s ongoing digital transformation initiatives, enhancing revenue resilience.
PGB emphasizes its commitment to a prudent and strategic approach, focusing on operational efficiency, strategic investments, and sustainable growth to navigate market volatilities.
Dividends
For the current financial period, PROPEL GLOBAL BERHAD has not declared or paid any dividends. This is a common practice for companies undergoing strategic transitions or focusing on reinvestment to fuel future growth.
Summary and
PROPEL GLOBAL BERHAD’s latest quarterly report paints a picture of a company in transition. While revenue has seen a significant decline across both the current quarter and cumulative nine-month period, the narrowing of the quarterly loss before tax is a positive sign, suggesting improved operational efficiency in the recent quarter. The widening cumulative loss, however, indicates that the challenges faced earlier in the financial year, including project completions and the absence of one-off gains, have had a substantial impact.
The company’s strategic focus on diversifying its revenue streams through the ICT segment and expanding its sustainable HVAC solutions, alongside its continued presence in the O&G sector, highlights its proactive approach to adapting to market dynamics. The various acquisitions and disposals reflect a continuous effort to streamline operations and focus on key growth areas. The completion of the private placement also strengthens its financial position for future endeavors.
However, investors should be mindful of the following key points:
- The significant decline in overall revenue for both the quarter and cumulative period.
- The shift to negative operating cash flow for the cumulative nine months, indicating that core operations are not generating sufficient cash.
- The widening of the cumulative loss before tax, primarily due to segment-specific challenges and the absence of one-off gains seen in the previous year.
- The ongoing impact of completed major projects on the Technical Services segment’s performance.
PGB is clearly navigating a challenging period, but its strategic diversification and focus on emerging opportunities could pave the way for future stability and growth. The lack of a dividend for the period underscores the current focus on reinvestment and strengthening the company’s financial base.
From a personal standpoint, PGB appears to be undertaking necessary strategic adjustments to adapt to a changing business environment. The diversification into ICT and sustainable HVAC solutions aligns with broader economic trends and Malaysia’s national initiatives, which could provide long-term growth avenues. While the financial results show the immediate impact of these transitions and market headwinds, the narrowing quarterly loss is a glimmer of hope that operational improvements are taking effect.
What are your thoughts on PROPEL GLOBAL BERHAD’s latest performance? Do you believe their strategic shifts will lead to a stronger financial footing in the coming years? Share your insights in the comments below!
