CAM Resources Navigates Challenging Waters with Strong Q1 2025 Performance
Ever wondered how a diversified Malaysian company like CAM Resources Berhad manages to thrive amidst a dynamic business landscape? The recently released first-quarter results for the period ended March 31, 2025, offer a compelling glimpse into the company’s resilience and strategic positioning.
This report reveals a period of significant growth in profitability, largely driven by robust contributions from its Palm Oil Mill and Renewable Energy segments. Despite facing ongoing market challenges, CAM Resources has demonstrated impressive operational improvements, nearly doubling its net profit for the quarter. Let’s dive into the numbers and explore what’s driving these results and what lies ahead for the company.
Core Data Highlights: A Quarter of Growth
CAM Resources Berhad kicked off the new financial year with a strong performance, showcasing substantial growth across its key financial metrics when compared to the corresponding quarter of the previous year.
Overall Financial Snapshot (Q1 2025 vs. Q1 2024)
Q1 2025
Revenue: RM108.10 million
Profit Before Tax: RM1.06 million
Net Profit: RM0.74 million
Basic Earnings Per Share: 0.40 sen
Q1 2024
Revenue: RM77.81 million
Profit Before Tax: RM0.59 million
Net Profit: RM0.37 million
Basic Earnings Per Share: 0.20 sen
The Group’s revenue surged by an impressive 38.9%, reaching RM108.10 million from RM77.81 million in the corresponding quarter of the previous year. This significant top-line growth translated directly into the bottom line, with Profit Before Tax escalating by 79.9% to RM1.06 million and Net Profit nearly doubling, jumping by 99.7% to RM0.74 million. Basic Earnings Per Share also saw a healthy increase from 0.20 sen to 0.40 sen.
Segmental Performance Breakdown
A closer look at each business segment reveals the drivers behind the overall performance:
| Segment | Q1 2025 Revenue (RM’000) | Q1 2024 Revenue (RM’000) | Revenue Change (%) | Q1 2025 PBT (RM’000) | Q1 2024 PBT (RM’000) | PBT Change (%) |
|---|---|---|---|---|---|---|
| Investment Holding | – | – | – | (97) | (154) | -37.0% (lower loss) |
| Manufacturing and Trading | 10,187 | 12,067 | -15.6% | (503) | (392) | 28.3% (higher loss) |
| Palm Oil Mill | 96,115 | 64,107 | 49.9% | 769 | 405 | 89.9% |
| Renewable Energy | 1,795 | 1,631 | 10.1% | 887 | 728 | 21.8% |
The **Palm Oil Mill** segment was the primary growth engine, with revenue increasing by nearly 50% due to greater availability of fresh fruit bunches, which directly contributed to its 89.9% surge in profit before tax. The **Renewable Energy** segment also showed healthy growth, with revenue up 10.1% and profit before tax increasing by 21.8%, reflecting steady operational improvements.
Conversely, the **Manufacturing and Trading** segment experienced a 15.6% decrease in revenue, leading to a higher loss, primarily due to lower sales. The **Investment Holding** segment, however, managed to reduce its loss by 37.0% due to lower operating expenses.
Quarter-on-Quarter Momentum (Q1 2025 vs. Q4 2024)
Comparing the current quarter’s performance to the immediate preceding quarter (Q4 2024) reveals a remarkable turnaround. The Group swung from a profit before tax loss of RM238,000 in Q4 2024 to a profit of RM1.06 million in Q1 2025, an astounding improvement of over 540%. This was largely propelled by a significant increase in profit from the Renewable Energy segment (up 160.9%) and a substantial reduction in loss within the Manufacturing and Trading segment (loss reduced by 61.7%). The Palm Oil Mill segment, however, saw a slight dip in profit due to reduced fresh fruit bunch availability.
Financial Health Check: Balance Sheet and Cash Flow
As of March 31, 2025, CAM Resources maintains a stable financial position. Total assets slightly increased to RM194.11 million from RM193.06 million at the end of 2024, with total equity also seeing a modest rise to RM152.11 million. The Net Assets Per Share remained consistent at RM0.83.
A standout aspect of this report is the impressive improvement in cash flow. The Group generated RM8.79 million in net cash from operating activities for the quarter, a significant turnaround from a negative cash flow of RM754,000 in the corresponding period last year. This strong operational cash generation led to a substantial increase in cash and cash equivalents, which stood at RM13.27 million at the end of the quarter, up from RM4.91 million a year ago. While total borrowings saw an increase, the robust cash generation indicates healthy liquidity and operational efficiency.
Risks and Prospects: Navigating the Future
CAM Resources acknowledges that the business environment remains challenging. However, the company is not resting on its laurels. Management has clearly articulated its commitment to adapting strategies to align with current market trends and enhancing cost optimisation efforts across all core business segments. The goal is to continuously improve operational efficiency, a crucial factor in maintaining profitability in a competitive landscape.
The company also disclosed recent strategic disposals, including a 70% equity interest in its wholly-owned subsidiary Naprogen Sdn. Bhd., which has now become an associate company, and the sale of a three-storey shop. These moves could indicate a strategic recalibration, potentially aimed at streamlining operations or unlocking capital for future growth initiatives.
It’s also worth noting the increase in contingent liabilities, specifically corporate guarantees for banking facilities granted to subsidiaries, which rose to RM20.12 million as at March 31, 2025, from RM16.87 million at the end of 2024. This is an area that investors might want to monitor.
Despite the challenges, the Group remains cautiously optimistic about its performance in the coming quarters, signaling confidence in its strategic direction and operational resilience.
Summary and
CAM Resources Berhad’s first-quarter 2025 report paints a picture of a company demonstrating strong operational recovery and growth, particularly driven by its Palm Oil Mill and Renewable Energy segments. The significant increase in revenue and net profit, coupled with robust cash flow generation, highlights the effectiveness of its current strategies in a challenging environment. While the Manufacturing and Trading segment faces headwinds and contingent liabilities have increased, the management’s focus on cost optimisation and operational efficiency provides a positive outlook.
It is important to remember that past performance is not indicative of future results, and all investment decisions should be made after thorough personal research and consultation with a qualified financial advisor. This blog post is for informational purposes only and does not constitute any form of investment advice or recommendation to buy or sell shares.
Key points to consider moving forward:
- The continued challenging business environment and its potential impact on overall demand and operational costs.
- The ability of the Palm Oil Mill segment to sustain its growth momentum, dependent on fresh fruit bunch availability and commodity prices.
- The effectiveness of strategies to mitigate losses in the Manufacturing and Trading segment.
- The implications of the increased contingent liabilities on the company’s financial risk profile.
- The success of strategic disposals in re-focusing the Group’s core business and enhancing financial flexibility.
What are your thoughts on CAM Resources’ strategic moves and their potential to maintain this positive momentum in the upcoming quarters? Share your insights in the comments below!
