TMK Chemical BHD. Navigates Q1 2025 with Resilient Performance Amidst Global Headwinds
Greetings, fellow investors! Today, we’re diving into the latest unaudited interim financial report from TMK Chemical BHD. for the first quarter ended 31 March 2025. As a relatively new entrant to the Main Market of Bursa Malaysia, having listed on 12 December 2024, this report provides crucial insights into the company’s operational strength and financial health in its early post-IPO journey.
While direct year-on-year comparisons for the first quarter are not available due to the recent listing, TMK Chemical has delivered a robust performance, showcasing its ability to generate significant revenue and maintain profitability. Let’s unpack the numbers and see what’s driving TMK Chemical’s trajectory.
Financial Performance Overview: Q1 2025 in Focus
TMK Chemical BHD. reported a solid start to 2025, with a substantial revenue stream. However, when compared to the immediate preceding quarter (Q4 2024), there’s a slight dip in performance, primarily attributed to lower sales volume.
Q1 2025
- Revenue: RM257,998,000
- Profit Before Tax: RM27,594,000
- Profit After Tax: RM20,732,000
Q4 2024
- Revenue: RM295,777,000
- Profit Before Tax: RM31,082,000
- Profit After Tax: RM22,936,000
As you can see, the Group’s revenue for Q1 2025 decreased by RM37.8 million, or 12.77%, compared to Q4 2024. This naturally led to a decline in profitability, with profit before tax falling by RM3.5 million (11.22%) and profit after tax by RM2.2 million (9.61%) quarter-on-quarter. Despite this sequential moderation, these are still healthy figures for the first quarter of the financial year.
Earnings Per Share (EPS)
For Q1 2025, TMK Chemical reported a basic and diluted Earnings Per Share (EPS) of 2.08 Sen. This is calculated based on the enlarged total number of 1,000,000,000 shares in issue following the company’s IPO in December 2024.
Segmental Performance: The Core Drivers
TMK Chemical’s business is primarily driven by two key segments: the provision of total chemical management and chemical terminal services. The latest report highlights the dominant contribution of its core business:
The provision of total chemical management segment was the powerhouse, contributing a staggering RM254.4 million, or 98.6%, of the total revenue for Q1 2025. This segment also includes the manufacturing of inorganic chemicals, which are sold to the Group by its wholly-owned subsidiary.
The provision of chemical terminal services added RM3.55 million to the revenue.
This strong concentration in chemical management underscores the company’s core expertise and market position in this specialized area.
Financial Health: A Look at the Balance Sheet and Cash Flow
Beyond the income statement, the balance sheet and cash flow statements provide a deeper understanding of TMK Chemical’s financial robustness and liquidity management.
Balance Sheet Snapshot (as at 31 March 2025 vs. 31 December 2024)
31 March 2025
- Total Assets: RM1,302,148,000
- Total Equity: RM752,969,000
- Total Liabilities: RM549,179,000
- Cash & Cash Equivalents: RM387,807,000
- Total Borrowings: RM324,645,000
- Net Assets Per Share: RM0.75
31 December 2024
- Total Assets: RM1,364,871,000
- Total Equity: RM733,207,000
- Total Liabilities: RM631,664,000
- Cash & Cash Equivalents: RM503,210,000
- Total Borrowings: RM406,623,000
- Net Assets Per Share: RM0.73
From the balance sheet, we observe a healthy increase in total equity, coupled with a significant reduction in total liabilities. This is a positive sign of strengthening financial structure. The total borrowings notably decreased from RM406.6 million to RM324.6 million, indicating effective debt management post-IPO, likely aided by the IPO proceeds allocated for loan repayment.
Cash Flow Activities (Q1 2025)
The cash flow statement reveals the movement of funds within the company:
| Cash Flow Category | Amount (RM’000) |
|---|---|
| Net cash used in operating activities | (18,718) |
| Net cash used in investing activities | (9,761) |
| Net cash used in financing activities | (86,983) |
| Net decrease in cash and cash equivalents | (115,462) |
The notable cash outflow from financing activities, primarily due to significant net repayments of term loans and other borrowings (RM78.3 million and RM3.6 million respectively), aligns with the balance sheet’s reduction in debt. This is a strategic move to de-leverage the company’s financial position, though it naturally impacts the cash and cash equivalents at the end of the period.
Risks and Prospects: Navigating a Complex Global Landscape
TMK Chemical operates in an environment subject to various external factors. The company acknowledges several key challenges that could influence its performance:
- Global Trade and Geopolitics: U.S. policies affecting global trade and international relations are expected to contribute to volatility in inorganic chemical pricing.
- Market Dynamics: Fluctuating market demand and supply conditions pose ongoing challenges.
- Economic Risks: Global geopolitical conflicts and recessionary risks could impact overall economic stability.
- Exchange Rate Fluctuations: Volatility in major currencies like the U.S. Dollar, Singapore Dollar, and Vietnamese Dong could affect profitability.
- Intense Competition: The market for chemical products and services remains highly competitive.
In response to these challenges, TMK Chemical remains steadfast in its commitment to enhancing productivity and strengthening supply chain resilience. These strategies are crucial for better weathering external, uncontrollable factors and ensuring long-term stability.
The company also has strategic capital commitments, including RM71.9 million approved and contracted for property, plant, and equipment, and an additional RM114.8 million approved but not yet contracted. This indicates an ongoing commitment to expansion and operational enhancement, including the expansion of its Banting Plant 1 and the proposed acquisition of land with a factory building in Singapore.
Summary and
TMK Chemical BHD. has presented a resilient Q1 2025 performance, particularly commendable given its recent listing and the absence of direct comparative historical data. While the quarter-on-quarter revenue and profit saw a slight decline due to lower sales volume, the overall financial health remains strong, highlighted by a significant reduction in borrowings and a healthy equity position. The company’s core chemical management segment continues to be a robust revenue generator, underscoring its market leadership.
Looking ahead, TMK Chemical is proactively addressing a complex global economic and geopolitical landscape by focusing on productivity and supply chain resilience. Their strategic capital expenditures also signal a commitment to future growth and operational efficiency.
Key risk points highlighted in the report include:
- Impact of U.S. policies on global trade and international relations.
- Volatility in inorganic chemical pricing.
- Fluctuating market demand and supply conditions.
- Ongoing global geopolitical conflicts and recessionary risks.
- Exchange rate fluctuations (U.S. Dollar, Singapore Dollar, and Vietnamese Dong).
- Intense market competition.
Despite these challenges, the management’s focus on internal efficiencies and strategic investments positions the company to navigate these headwinds effectively.
From a professional standpoint, TMK Chemical’s Q1 2025 report demonstrates a company that is not just focused on top-line growth but also on strengthening its balance sheet and operational resilience. The significant reduction in debt post-IPO is a strong indicator of prudent financial management and a commitment to long-term stability. While the lack of Q1 2024 comparative data means we rely more on sequential comparisons and the audited full-year 2024 figures, the current performance suggests a stable foundation.
What are your thoughts on TMK Chemical’s ability to maintain this momentum and navigate the challenging global economic environment in the coming quarters? Share your insights in the comments below!
