NESTCON BERHAD’s Q1 2025 Performance: Navigating Challenges with Strategic Growth
Hello fellow investors and market watchers! Today, we’re diving into the latest financial report from NESTCON BERHAD for the first quarter ended 31 March 2025. This report offers a crucial glimpse into the company’s operational health and strategic direction amidst a dynamic economic landscape. While the quarter saw some shifts in revenue, NESTCON’s ability to significantly boost its profit attributable to owners and maintain a robust order book truly stands out. Let’s unpack the numbers and see what’s driving their performance and what lies ahead.
Core Financial Highlights: A Mixed Bag with Promising Signs
NESTCON BERHAD’s first quarter of 2025 presented a mixed financial picture, showing a dip in overall revenue but a remarkable surge in profitability for shareholders. Understanding these movements requires a closer look at the key figures compared to the same period last year.
Current Quarter (1Q2025)
Revenue: RM169.79 million
Profit Before Tax (PBT): RM2.02 million
Net Profit (Profit for the financial period): RM1.72 million
Profit Attributable to Owners: RM2.74 million
Basic Earnings Per Share: 0.38 sen
Preceding Year Corresponding Quarter (1Q2024)
Revenue: RM208.49 million
Profit Before Tax (PBT): RM2.39 million
Net Profit (Profit for the financial period): RM1.68 million
Profit Attributable to Owners: RM1.58 million
Basic Earnings Per Share: 0.22 sen
While revenue for 1Q2025 saw an 18.56% decrease from RM208.49 million to RM169.79 million, and Profit Before Tax (PBT) experienced a 15.28% reduction from RM2.39 million to RM2.02 million, the Group’s net profit actually saw a slight increase of 2.20% to RM1.72 million. More impressively, the profit attributable to owners of the Company surged by a remarkable 73.64% to RM2.74 million, leading to a substantial increase in Basic Earnings Per Share (EPS) from 0.22 sen to 0.38 sen, a jump of 72.73%. This indicates improved efficiency in managing non-controlling interests and tax expenses, translating to higher returns for shareholders.
Quarter-on-Quarter Performance (1Q2025 vs. 4Q2024)
Comparing the current quarter to the immediate preceding quarter (4Q2024), NESTCON’s revenue decreased by 18.08% from RM207.27 million to RM169.79 million. This was primarily attributed to certain contracts nearing completion, resulting in a lower level of construction activities. Similarly, PBT registered a marginal decrease of 3.16%, from RM2.09 million to RM2.02 million.
Segmental Contributions
The revenue in 1Q2025 was predominantly driven by the Construction and Renewable Energy segments:
| Segment | Revenue (RM’000) |
|---|---|
| Building and Infrastructure | 165,106 |
| Renewable Energy | 4,681 |
| Total Revenue | 169,787 |
The Building and Infrastructure division continues to be the primary revenue driver, while the Renewable Energy division, though currently a smaller contributor, represents a strategic growth area for the Group.
Financial Health: Balance Sheet and Cash Flow
As of 31 March 2025, NESTCON’s financial position remains robust. Total assets stood at RM769.45 million, with total equity slightly increasing to RM152.16 million from RM150.35 million at the end of 2024. Net assets per share remained stable at RM0.21.
A closer look at the cash flow statement reveals positive trends. Net cash from operating activities significantly increased to RM2.16 million for the year-to-date 1Q2025, a substantial improvement from RM0.68 million in the same period last year. This indicates better operational cash generation. The Group also saw a net increase in cash and cash equivalents of RM9.85 million, ending the period with RM31.45 million in cash and cash equivalents, a healthy jump from RM5.63 million a year ago.
Navigating Headwinds: Risks and Strategic Outlook
NESTCON BERHAD is operating in an environment marked by global uncertainties. The proposed United States tariffs, for instance, are creating ripples across international markets, and Malaysia is not immune. The local construction industry could face indirect challenges from a weaker external trade environment, potential reductions in foreign investment, and cost pressures due to supply chain disruptions and rising imported material prices. These factors could lead to slower project rollouts and tighter financing conditions.
However, NESTCON is not standing still. The Group is actively implementing prudent strategies, focusing on proactive cost management across all operations, and exploring innovative solutions to adapt to these economic shifts. This forward-thinking approach is crucial for ensuring sustainable growth in an evolving market.
On a highly positive note, NESTCON has started 2025 with strong momentum, securing five new contracts totaling a substantial RM457.43 million in the first half of the year. This achievement underscores their continued competitiveness and market trust. As of the report date, the Group’s unbilled order book stands impressively at RM1.84 billion, which is expected to provide a positive contribution to their financial performance over the next three years. The Group’s commitment to actively participating in tenders further demonstrates their drive to enhance and replenish
