Navigating the Tides: A Deep Dive into ONLY WORLD GROUP’s Latest Financials
Greetings, fellow investors! Today, we’re unrolling the latest financial report from ONLY WORLD GROUP HOLDINGS BERHAD (OWG), a prominent name in Malaysia’s leisure and hospitality sector. This report for the third quarter ended 31 March 2025 offers a glimpse into how the company is performing amidst the recovering tourism landscape.
While the broader tourism industry shows signs of robust recovery, OWG’s latest figures present a mixed bag, revealing both strategic expansions and the challenges of increasing operational costs. Let’s unpack the key highlights and understand what’s driving these results.
Q3 2025 Performance: A Challenging Quarter
The third quarter (3 months ended 31 March 2025) saw OWG grapple with a significant decline in profitability, shifting from a profit to a loss compared to the same period last year. This was primarily influenced by a drop in revenue and a squeeze on profit margins.
Q3 2025
Revenue: RM31.70 million
Profit Before Tax: RM(2.59) million (Loss)
Profit After Tax: RM(3.79) million (Loss)
Basic Earnings Per Share: (0.83) sen (Loss)
Q3 2024
Revenue: RM36.64 million
Profit Before Tax: RM3.26 million
Profit After Tax: RM2.58 million
Basic Earnings Per Share: 0.56 sen
The Group’s revenue decreased by 13.49%, from RM36.64 million to RM31.70 million. More notably, the profit before taxation plunged by 179.32%, turning into a loss of RM2.59 million from a profit of RM3.26 million in the corresponding quarter last year. This substantial shift was attributed to lower revenue, a compressed gross profit margin, and higher operational costs stemming from increased rental, depreciation, and staff expenses, particularly with the opening of new Jungle Gym playland outlets.
Year-to-Date (9 Months) Performance: Persistent Headwinds
Looking at the cumulative nine months ended 31 March 2025, the trend of declining profitability continued, albeit with a smaller revenue dip. The operational challenges evident in the third quarter had a sustained impact on the year-to-date figures.
9M 2025
Revenue: RM102.27 million
Profit Before Tax: RM(0.29) million (Loss)
Profit After Tax: RM(2.97) million (Loss)
Basic Earnings Per Share: (0.65) sen (Loss)
9M 2024
Revenue: RM103.52 million
Profit Before Tax: RM8.20 million
Profit After Tax: RM5.69 million
Basic Earnings Per Share: 1.24 sen
For the nine-month period, revenue saw a slight decrease of 1.21% to RM102.27 million. However, the profit before taxation turned into a loss of RM0.29 million, a significant drop from the RM8.20 million profit recorded in the prior year’s corresponding period, marking a 103.54% decline. This was largely due to the weaker performance of the Food Service Operations and the pervasive impact of higher rental, depreciation, staff, and operational expenses linked to the expansion of new outlets.
Segmental Breakdown: A Tale of Two Operations
A closer look at OWG’s business segments reveals a divergence in performance:
Amusement and Recreation Operations
This segment showed resilience and growth:
- Q3 2025 vs Q3 2024: Revenue increased by RM1.20 million (9.59%) to RM13.76 million. This growth was primarily driven by the opening of additional Jungle Gym playland outlets, which now total 15, up from 10 in the same period last year. This expansion helped offset lower footfall to the Group’s outlets in Genting.
- 9M 2025 vs 9M 2024: Revenue surged by RM10.97 million to RM44.95 million. This impressive increase was a result of the expanded Jungle Gym network and the re-opening of the Pedas adventure land in late January 2025.
Food Service Operations
This segment faced considerable headwinds:
- Q3 2025 vs Q3 2024: Revenue decreased by RM4.07 million to RM16.47 million. Despite festive holidays, the food and beverage business experienced lower-than-anticipated sales momentum.
- 9M 2025 vs 9M 2024: Revenue declined by RM3.43 million to RM51.80 million. This was primarily due to lower festive sales, reduced footfall at the Group’s F&B outlets in Genting, and the impact of the fasting month during the quarter.
Financial Health and Cash Flow
OWG’s balance sheet showed minor shifts. Total assets slightly decreased from RM420.07 million to RM417.82 million, and total equity saw a marginal dip from RM229.77 million to RM226.79 million. Net assets per share also slightly decreased from RM0.50 to RM0.49.
On a positive note, the Group managed to reduce its total borrowings from RM51.22 million as of 30 June 2024 to RM47.19 million as of 31 March 2025, indicating an effort to manage debt. However, the cash flow statement for the 9-month period revealed a significant change:
| Cash Flow Metric (9 Months Ended) | 31/3/2025 (RM’000) | 31/3/2024 (RM’000) | Change (RM’000) |
|---|---|---|---|
| Net Cash Generated from Operations | 14,588 | 25,577 | (10,989) |
| Net Cash Used in Investing Activities | (16,697) | (27,660) | 10,963 |
| Net Cash (Used In)/From Financing Activities | (4,030) | 3,838 | (7,868) |
| Net Increase/(Decrease) in Cash and Cash Equivalents | (6,139) | 1,755 | (7,894) |
While net cash used in investing activities decreased, the net cash generated from operations significantly declined. Furthermore, the financing activities shifted from generating cash to using cash, leading to a net decrease in cash and cash equivalents for the period.
Risks and Prospects: Riding the Tourism Wave
OWG acknowledges the challenges but remains optimistic about the future, aligning its strategies with the broader tourism recovery in Malaysia.
Prospects
Tourism Malaysia’s data paints a promising picture, with visitor arrivals increasing by 8.3% from January to December 2024 compared to pre-pandemic 2019 levels, and a 31.1% increase compared to 2023. The “Visit Malaysia 2026” campaign aims to attract 35.6 million tourists and generate RM147.1 billion in tourism receipts. OWG plans to capitalize on these opportunities by leveraging its extensive industry experience, safeguarding its market position, and enhancing business performance.
Challenges and Risks
Despite the positive tourism outlook, OWG faces several operational and financial risks:
- Increased Operational Costs: The expansion of new outlets, while strategic, has led to higher rental, depreciation, and staff costs, impacting overall profitability.
- Market Sensitivity: The Food Service Operations are sensitive to factors like festive sales momentum and footfall, as evidenced by lower-than-anticipated sales and the impact of the fasting month.
- Genting Footfall: Lower visitor numbers to the Group’s Genting outlets continue to be a concern, affecting both amusement and F&B segments.
- Taxation: The Group’s effective tax rate is higher than the statutory rate due to non-tax deductible expenses and losses from certain subsidiaries that cannot be offset against taxable profits elsewhere.
- Contingent Liabilities: The company has corporate guarantees amounting to RM62.8 million to banks for subsidiaries, which represents a potential liability.
Summary and Outlook
Summary and
ONLY WORLD GROUP HOLDINGS BERHAD’s latest quarterly report presents a mixed picture. While the Group is strategically expanding its Amusement and Recreation segment, notably with more Jungle Gym outlets and the re-opening of Pedas adventure land, these efforts are currently overshadowed by rising operational costs and a challenging environment for its Food Service Operations. The shift to a loss before tax for both the quarter and the nine-month period highlights the pressures on profitability.
Despite the current headwinds, the broader Malaysian tourism sector is showing strong recovery and positive government initiatives like Visit Malaysia 2026 provide a fertile ground for growth. OWG’s ability to manage its escalating costs, optimize the performance of its new ventures, and improve footfall across all its outlets will be crucial in translating the positive tourism outlook into sustained profitability.
Key points to monitor moving forward include:
- The successful integration and profitability of newly opened Jungle Gym outlets.
- Strategies to enhance sales momentum and footfall in Food Service Operations, especially in key locations like Genting.
- Effective cost management to improve gross profit margins.
- The impact of the broader tourism recovery on the Group’s overall revenue and profitability.
No dividend was declared for the current quarter or the financial year-to-date.
What’s Your Take?
OWG is navigating a complex environment, balancing ambitious expansion plans with the immediate pressures of rising costs and fluctuating consumer traffic. The success of their new ventures and their ability to effectively manage expenses will undoubtedly be key determinants of their future performance.
Given the mixed performance and the ambitious expansion plans, what are your thoughts on OWG’s strategy to capture the recovering tourism market? Share your views in the comments below!
