Hello, fellow investors and market watchers!
Eversendai Corporation Berhad (ECB), a prominent name in structural steel, power, and oil & gas, has just unveiled its First Quarter 2025 financial report for the period ending 31 March 2025. As a company incorporated in Malaysia and listed on the Main Market of Bursa Malaysia, Eversendai’s performance is always keenly watched, especially given its global footprint and significant projects.
This report paints a picture of a company on a path of recovery and strategic repositioning. While the top-line revenue saw a modest increase, the real highlight is the substantial improvement in profitability attributable to shareholders, driven by strategic cost management and the realization of variation claims. Let’s dive deeper into the numbers and what they mean for Eversendai’s journey ahead.
Q1 2025 Performance: A Closer Look at the Numbers
Eversendai’s First Quarter 2025 results demonstrate a commendable turnaround in profitability, especially when looking at the bottom line. Here’s a snapshot of the key financial highlights compared to the same period last year:
Q1 2025
Revenue: RM406.3 million
Profit Before Tax: RM11.7 million
Profit for the Period: RM7.0 million
Profit Attributable to Equity Holders: RM2.5 million
Basic Earnings Per Share: 0.31 sen
Q1 2024
Revenue: RM399.7 million
Profit Before Tax: RM7.5 million
Profit for the Period: RM4.5 million
Profit Attributable to Equity Holders: RM0.4 million
Basic Earnings Per Share: 0.05 sen
Key Takeaways from the Income Statement:
- Revenue Growth: The Group recorded a revenue of RM406.3 million, a marginal increase of 1.6% compared to RM399.7 million in the corresponding quarter last year. This steady top-line performance indicates continued project execution.
- Significant Profitability Jump: Profit before tax surged by an impressive 56.7% to RM11.7 million from RM7.5 million previously. More strikingly, the profit attributable to equity holders of the Company soared by nearly 591.3% to RM2.5 million from just RM0.4 million in Q1 2024. This substantial improvement translated into Basic Earnings Per Share rising from 0.05 sen to 0.31 sen.
- Drivers of Profit Growth: The report attributes this increase mainly to the realization of variation claims from projects and a notable reduction in finance costs. This suggests effective project management and potentially improved debt management.
- Gross Profit vs. Overall Profit: Interestingly, Gross Profit declined by RM27.9 million. However, the Group’s overall profitability improved due to higher other income (including a significant increase in sales of scrap and unrealised foreign exchange gains) and lower operating and administrative expenses, coupled with the reduction in finance costs.
Segmental Performance: A Mixed Bag
Eversendai’s diversified geographical presence continues to play a crucial role in its operations. Here’s how each segment performed:
| Segment | Q1 2025 Revenue (RM’000) | Q1 2025 PBT/LBT (RM’000) | Q1 2024 PBT/LBT (RM’000) |
|---|---|---|---|
| Middle East | 303,792 (74.8% of total) | 28,135 (Profit) | 34,320 (Profit) |
| India | 75,864 (18.6% of total) | (24,978) (Loss) | (2,444) (Loss) |
| Southeast Asia | 26,622 (6.6% of total) | 5,306 (Profit) | 7,085 (Profit) |
| Others | – | 3,250 (Profit) | (31,487) (Loss) |
The Middle East remains the largest revenue contributor, but its profit before tax saw a reduction compared to the previous year’s corresponding quarter. The India segment continues to be a drag, reporting a significantly larger loss. Southeast Asia also saw a slight dip in profit. However, the ‘Others’ segment showed a remarkable turnaround, shifting from a substantial loss to a profit, which helped offset some of the weaker regional performances.
Financial Health: Strengthening the Balance Sheet
Beyond the income statement, Eversendai’s balance sheet shows strategic shifts. While total current assets increased, driven by higher inventories, contract assets, and receivables, the Group managed to significantly reduce its current borrowings. This was achieved by reclassifying a large portion of short-term debt to non-current liabilities, indicating a successful refinancing or restructuring that enhances the company’s liquidity profile and reduces immediate financial pressure.
Cash and cash equivalents saw a decrease, but the overall net assets per share remained stable, reflecting a relatively stable equity base.
Prospects and the Path Ahead
Eversendai’s management remains optimistic about the future, underpinned by a robust outstanding order book of RM5.3 billion. This substantial pipeline of projects provides a strong foundation for sustained revenue generation in the coming quarters.
Key projects like the Trojena Ski Village from Neom and the Qiddiya Speed Park project in the Kingdom of Saudi Arabia are progressing well, ensuring that the Group’s fabrication factories operate at optimal capacity. The company’s ongoing efforts to reorganize resources, optimize costs, and improve operational efficiency are crucial steps in its recovery strategy.
Despite the positive outlook, challenges remain. The continued losses in the India segment and the slight decline in PBT in the Middle East and Southeast Asia segments compared to last year’s Q1 highlight areas that require continued focus. Furthermore, foreign currency fluctuations can introduce volatility, as seen with the negative foreign currency translation impact this quarter.
Summary and
Eversendai’s Q1 2025 report showcases a strong rebound in profitability attributable to its shareholders, primarily driven by effective cost management, reduced finance costs, and the successful realization of variation claims. The significant order book provides a clear runway for future revenue. The company’s proactive management of its debt profile by shifting short-term liabilities to long-term is a positive indicator of improving financial stability.
However, investors should also note the mixed performance across segments, particularly the persistent losses in India and the slight PBT decline in the Middle East and Southeast Asia. The Group’s ability to maintain its cost optimization strategies and successfully execute its substantial order book will be key determinants of its continued progressive financial performance.
Key points to monitor:
- The sustained turnaround in profitability and its consistency across future quarters.
- Progress in reducing losses in the India segment.
- Effective management of foreign exchange risks, especially given the global nature of its projects.
- Successful execution and timely completion of the large outstanding order book.
What are your thoughts on Eversendai’s latest financial report? Do you believe the company can maintain this positive momentum and continue to strengthen its financial position in the coming quarters? Share your insights in the comments below!
Stay tuned for more updates on Malaysian companies and market trends!
