NOVA WELLNESS GROUP BERHAD’s Q3 FY2025: A Deep Dive into Growth and Strategic Shifts

Greetings, fellow Malaysian retail investors! Today, we’re unboxing the latest financial report from NOVA WELLNESS GROUP BERHAD for its third quarter ended 31 March 2025. This report offers a fascinating glimpse into the company’s performance, revealing a quarter of robust growth, particularly in its OEM segment, alongside some notable shifts in its overall financial health and strategic direction.

While the quarter itself shines with impressive profit growth, a closer look at the cumulative nine-month performance highlights the challenges of navigating fluctuating costs and currency movements. Let’s delve into the numbers to understand what’s driving NOVA WELLNESS’s journey.

Core Data Highlights: A Tale of Two Periods

The third quarter of the financial year 2025 (Q3 FY2025) has been a strong one for NOVA WELLNESS GROUP BERHAD, showcasing significant improvements compared to the same period last year. However, when we zoom out to the cumulative nine-month performance, a more nuanced picture emerges.

Quarterly Performance (Q3 FY2025 vs Q3 FY2024)

The company delivered a remarkable increase in both revenue and profit for the quarter. This positive momentum was largely driven by a substantial increase in OEM revenue and a write-back in stock obsolescence provisions.

This translates to a

and an even more impressive

compared to the same quarter last year. Basic Earnings Per Share also saw a healthy increase of 60.3%. The significant boost in profit was primarily attributed to a write-back of provision for stock obsolescence, alongside better management of other operating and selling & distribution expenses.

Cumulative Performance (9 Months FY2025 vs 9 Months FY2024)

While the quarterly performance was strong, the cumulative nine-month results present a mixed bag. Revenue continued its upward trend, but profitability faced headwinds.

Revenue for the nine-month period increased by

. However, Profit After Tax for the cumulative period saw a

. The report attributes this decline mainly to an erosion of the company’s gross profit margin, which was impacted by increased material costs due to foreign currency exchange fluctuations. This highlights the sensitivity of the company’s profitability to external economic factors.

Quarter-on-Quarter Comparison (Q3 FY2025 vs Q2 FY2025)

Comparing the current quarter with the immediate preceding quarter (Q2 FY2025) further illustrates the positive internal operational improvements.

Revenue showed a modest

, but Profit Before Tax soared by

and Profit After Tax by

. This significant jump in profitability from the immediate preceding quarter was again primarily due to a reduction in the provision for stock obsolescence.

Segmental Performance: OEM Steals the Show

A key takeaway from this report is the dynamic shift in revenue contribution from NOVA WELLNESS’s business segments. While the House Brand segment remains a significant contributor, the OEM (Original Equipment Manufacturer) business has shown explosive growth.

For the quarter, OEM revenue skyrocketed by

, demonstrating a strong demand for their manufacturing services. Cumulatively, OEM revenue has grown by an impressive

. In contrast, the House Brand segment saw a slight 0.5% increase for the quarter but a 7% decrease for the cumulative nine-month period. This indicates a strategic shift or a growing reliance on the OEM segment to drive overall revenue growth.

Financial Health Snapshot

A quick look at the balance sheet and cash flow reveals a generally stable financial position, albeit with some changes in liquidity. As of 31 March 2025, the company reported total assets of RM117,172,172 and total equity of RM109,118,425. It’s positive to note that the Group has

, which is a strong indicator of financial prudence.

However, cash and cash equivalents have seen a notable decrease. From RM10,017,310 as at 31 March 2024, it has fallen to RM3,413,818 as at 31 March 2025. Similarly, net cash generated from operating activities for the nine-month period decreased from RM6,952,788 to RM936,722. This reduction in operating cash flow and overall cash balances will be an area to monitor, especially as the company continues its strategic initiatives and manages input costs.

Risks and Prospects: Navigating the Headwinds

NOVA WELLNESS GROUP BERHAD acknowledges the challenges it faces while outlining its strategies for future growth. The primary concern, as highlighted in the report, is the erosion of gross profit margin due to fluctuating foreign currency exchange rates affecting material costs. This is a common challenge for companies with international supply chains and will require careful management.

On the strategic front, the company is focused on:

• Expanding Product Portfolio and Reach: This suggests an effort to diversify revenue streams and capture new market segments.
• Improving Production Efficiencies: A direct response to cost pressures, aiming to optimize operations and mitigate the impact of rising material costs.
• Sustaining Market Interests: By paying close attention to consumer expectations, the company aims to maintain its competitive edge and brand loyalty.
• Maintaining Product Quality: Through adequate safety protocols, ensuring that growth does not come at the expense of quality.

The management has expressed confidence in their ability to reverse the erosion of gross profit margin through better currency management and the rationalisation of vendors and expenditure. This proactive approach is crucial for long-term profitability.

As a retail investor, it’s essential to consider these factors. The strong quarterly performance is encouraging, but the cumulative profitability dip and the decrease in operating cash flow warrant continued attention. The strategic emphasis on OEM growth and cost management will be key determinants of future success.

What are your thoughts on NOVA WELLNESS GROUP BERHAD’s latest performance? Do you believe their strategies for managing currency fluctuations and growing the OEM segment will be enough to ensure sustained profitability? Share your insights in the comments below!