Core Financial Highlights: A Closer Look at the Numbers

Quarterly Performance (Q3 FY2025 vs. Q3 FY2024)

The third quarter of the financial year 2025 saw TFP Solutions Berhad demonstrate significant improvements in its top-line and bottom-line performance. Here’s a quick comparison:

As you can see, revenue surged by 22.19%, while gross profit saw an impressive 161.59% jump. More importantly, the company managed to slash its loss before taxation by 55.86%, indicating improved operational efficiency and cost control. The loss attributable to equity holders also saw a substantial reduction of 45.66%.

Year-to-Date Performance (YTD FY2025 vs. YTD FY2024)

Looking at the cumulative performance for the nine months ended 31 March 2025, the positive trend continues:

Year-to-date revenue grew by 40.63%, and gross profit more than doubled, increasing by 113.69%. The cumulative loss before taxation was reduced by 45.54%, showcasing a consistent improvement throughout the financial year.

Segmental Performance: Understanding the Drivers

TFP Solutions Berhad operates primarily in two segments: Fintech and Business Management Solutions (BMS). Here’s how each performed:

The Fintech segment saw a significant increase in revenue, both quarterly and year-to-date, primarily maintaining its mobile airtime reloads while adding features to meet user needs. While BMS revenue for the quarter decreased slightly, its year-to-date performance showed growth. The report highlights that the increase in overall revenue and gross profit, and the reduction in loss, were mainly driven by customisation and enhancement of software in the BMS segment, alongside improved performance in Fintech and effective cost control measures.

Financial Health: A Snapshot of the Balance Sheet and Cash Flow

While operational performance is improving, it’s crucial to look at the company’s financial health as at 31 March 2025, compared to its audited financial year-end on 30 June 2024.

We observe a decrease in total assets (10.41%), total equity (17.14%), and shareholders’ funds (23.01%) compared to the last financial year-end. Notably, cash and bank balances have significantly reduced by 82.22% from RM900,000 to RM160,000, indicating cash outflow despite reduced losses.

However, a look at the cash flow statement for the year-to-date period provides a more encouraging picture of operational cash management:

TFP Solutions Berhad significantly reduced its net cash used in operating activities by 88.83% year-on-year, and the overall net decrease in cash and cash equivalents improved by 90.89%. This improvement was partly bolstered by proceeds from the issuance of shares amounting to RM300,000 during the current period, which contributed to a positive net cash flow from financing activities.

No Dividends Declared

For the quarter ended 31 March 2025, the company did not declare any dividends.

Risks and Prospects: Charting the Future

Promising Prospects

TFP Solutions Berhad is actively pursuing several strategic initiatives that hold significant growth potential:

• Digitalizing the Foreign Community: The company sees immense opportunity in providing a comprehensive fintech ecosystem for the estimated 2.5 million foreign community in Malaysia. This includes essential financial services like mobile airtime reloads, e-wallet solutions, and approved salary disbursement services, creating convenience for both the foreign community and their employers.
• E-Invoicing Opportunities: With the upcoming mandatory e-invoicing by Lembaga Hasil Dalam Negeri (LHDN), TFP is well-positioned to assist SMEs. Despite a delay for Phase 3 SMEs until January 2026, this creates a window for TFP to offer system enhancement, customisation services for existing ERP clients, and cloud-based accounting systems with ready e-invoicing features. A dedicated e-invoicing platform is expected to roll out in Q4 FY2025.
• Expansion into the Koperasi Sector: TFP is collaborating with Koperasi OneFintech Berhad to offer an Integrated Cooperatives Management Information System (ICMIS) to the Koperasi sector. This new business segment, which has already started generating revenue in Q3 FY2025, aims to provide modules like SmartHR & Payroll, membership systems, and accounting systems with e-invoicing features.

The Group remains committed to enhancing its financial performance across all segments by boosting demand for its products and services, alongside rigorous cost control measures.

Navigating the Risks

Despite the positive momentum, TFP Solutions Berhad faces inherent risks:

1. Sustained Losses: While losses have significantly reduced, the company is still operating at a loss, which impacts its equity and cash reserves.
2. Cash Flow Management: The current low cash and bank balances highlight the need for continued prudent cash flow management, especially as new initiatives require investment.
3. Market Adoption of New Initiatives: The success of TFP’s new ventures in the foreign community, e-invoicing, and Koperasi sectors will heavily depend on market acceptance and execution capabilities.
4. Corporate Guarantees: The company has issued corporate guarantees of up to RM3.50 million in favour of vendor companies, which represents a contingent liability.

The company’s ability to convert its strategic initiatives into sustainable profitability will be key to mitigating these risks.