Greetings, fellow investors and market enthusiasts!
Today, we’re diving deep into the latest unaudited consolidated financial statements of Seremban Engineering Berhad (SEB) for the third quarter ended 31 March 2025. As a prominent player in the fabrication of process equipment, metal structures, and providing essential maintenance, repair, and shutdown services, SEB’s performance offers valuable insights into the broader industrial landscape. While the report reveals a challenging quarter with declines in revenue and profit, it also outlines the company’s strategic resilience and optimistic outlook for the future.
Let’s break down the key takeaways from this report and see what it means for SEB moving forward.
Key Highlights at a Glance:
- Significant decrease in quarterly and year-to-date revenue and profit after tax.
- Strong increase in net cash generated from operating activities for the nine-month period.
- Improvement in Net Asset per share, reflecting a healthier balance sheet.
- No dividend recommended for the current quarter.
Decoding SEB’s Performance: A Closer Look at the Numbers
The third quarter of the financial year 2025 (Q3 FY2025) proved to be a tough period for SEB, with notable contractions in its top and bottom lines when compared to the same period last year. Let’s examine the figures:
Quarterly Performance (3 Months Ended 31 March 2025 vs 31 March 2024)
Current Quarter (31 Mar 2025)
Revenue: RM 22.04 million
Profit Before Tax (PBT): RM 0.54 million
Profit After Tax (PAT): RM 0.28 million
Basic Earnings Per Share: 0.35 sen
Preceding Corresponding Quarter (31 Mar 2024)
Revenue: RM 78.85 million
Profit Before Tax (PBT): RM 0.95 million
Profit After Tax (PAT): RM 0.95 million
Basic Earnings Per Share: 1.19 sen
Revenue for the current quarter saw a substantial drop of 72.06% (RM 56.81 million) compared to the same period last year. This was primarily attributed to a decrease in revenue contribution from projects in the electrical & electronics industries. Consequently, Profit After Tax also decreased by 70.85% (RM 0.67 million), further impacted by a reversal of deferred tax asset.
Year-to-Date Performance (9 Months Ended 31 March 2025 vs 31 March 2024)
Current Financial Year (31 Mar 2025)
Revenue: RM 95.39 million
Profit Before Tax (PBT): RM 1.66 million
Profit After Tax (PAT): RM 0.86 million
Basic Earnings Per Share: 1.08 sen
Preceding Corresponding Financial Year (31 Mar 2024)
Revenue: RM 187.56 million
Profit Before Tax (PBT): RM 2.02 million
Profit After Tax (PAT): RM 2.02 million
Basic Earnings Per Share: 2.54 sen
The year-to-date figures paint a similar picture, with revenue declining by 49.14% (RM 92.17 million) and Profit After Tax by 57.37% (RM 1.16 million). The primary reasons cited for this cumulative decline were reduced revenue from projects in both the electrical & electronics and food industries, alongside the deferred tax asset reversal.
Snapshot of Financial Health (Balance Sheet as at 31 March 2025)
While the profit figures were challenging, SEB’s balance sheet shows some positive shifts:
| Financial Metric | As at 31 Mar 2025 (RM’000) | As at 30 Jun 2024 (RM’000) | Change (RM’000) | Percentage Change |
|---|---|---|---|---|
| Total Assets | 163,956 | 202,221 | (38,265) | -18.92% |
| Total Equity | 38,139 | 37,276 | 863 | +2.31% |
| Total Liabilities | 125,817 | 164,945 | (39,128) | -23.72% |
| Net Asset Per Share (RM) | 0.48 | 0.47 | 0.01 | +2.13% |
| Deposit, Cash and Bank Balances | 15,349 | 13,351 | 1,998 | +14.96% |
It’s encouraging to see an increase in total equity and net asset per share, indicating a strengthening of the company’s underlying value. The decrease in total liabilities is also a positive sign, suggesting improved financial management. Furthermore, the company’s “Deposit, cash and bank balances” increased, providing a healthier liquidity position.
Cash Flow Dynamics (9 Months Ended 31 March 2025 vs 31 March 2024)
Despite the revenue challenges, SEB demonstrated remarkable efficiency in generating cash from its core operations:
Current Financial Year (31 Mar 2025)
Net Cash Generated from Operations: RM 13.28 million
Net Cash Used in Investing Activities: (RM 2.63 million)
Net Cash Used in Financing Activities: (RM 10.99 million)
Cash and Cash Equivalents at End of Period: (RM 4.84 million)*
Preceding Corresponding Financial Year (31 Mar 2024)
Net Cash Generated from Operations: RM 0.78 million
Net Cash Used in Investing Activities: (RM 4.54 million)
Net Cash Generated from Financing Activities: RM 2.97 million
Cash and Cash Equivalents at End of Period: RM 1.04 million
*Note: The negative cash and cash equivalents figure at the end of the period is primarily due to bank overdrafts, as detailed in the cash flow statement. The company’s overall “Deposit, cash and bank balances” (which excludes bank overdrafts) remains positive and has increased.
A significant highlight is the substantial increase in net cash generated from operating activities, jumping from RM 0.78 million to RM 13.28 million. This indicates a strong ability to convert operations into cash, which is crucial for long-term sustainability. While there was a shift from cash generated to cash used in financing activities, leading to a net decrease in overall cash and cash equivalents, the operational cash flow strength is a positive sign.
Navigating Risks and Charting the Future
SEB acknowledges the prevailing global uncertainties, including geopolitical tensions, inflationary pressures, and tariff fluctuations, which are expected to keep the market volatile and challenging in the near term. However, the company is not standing still.
Their strategic response involves actively expanding their customer base and diversifying product offerings. This includes venturing into civil construction, structural steel, piping, architectural works, and pressure vessel fabrication. By exploring new business opportunities, SEB aims to mitigate potential adverse impacts and strengthen its order book.
Barring any unforeseen circumstances, the Group remains optimistic about achieving a positive performance in the remaining quarters of the financial year.
It’s also worth noting the ongoing material litigation, specifically the counterclaim by CN Eleco Engineering Sdn. Bhd. against MIE Industrial Sdn. Bhd. and SEB, with a trial scheduled for March 2027. Additionally, a winding-up petition by Xinsteel Sdn. Bhd. was announced in May 2025. These legal matters will require close monitoring.
Summary and
Seremban Engineering Berhad’s latest quarterly report presents a mixed bag. While the decline in revenue and profit is evident, largely due to reduced project contributions from specific industries and a deferred tax asset reversal, the underlying financial health shows resilience with improved operational cash flow and a stronger balance sheet. The company’s proactive strategy to diversify its services and expand its customer base in a volatile global environment is commendable. As a blogger, I am not providing any , but rather an analysis of the reported figures and prospects for informational purposes. Investors should consider all aspects of the report and conduct their own due diligence.
Key risk points highlighted by the company include:
- Ongoing global uncertainties stemming from geopolitical tensions.
- Persistent inflationary pressures.
- Potential impacts from tariff fluctuations.
- A volatile and challenging global market environment in the near term.
SEB’s journey through these challenging times will be defined by its ability to execute its diversification strategies and navigate the external headwinds. The strong operational cash flow is a vital asset that can fuel future growth and stability.
What are your thoughts on SEB’s latest performance and its strategic direction? Do you think the company can maintain this growth momentum in its operational cash flow and successfully diversify its business in the coming years? Share your insights in the comments below!
