Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial performance of Kanger International Berhad, a company that has been navigating a dynamic economic landscape. Kanger recently released its unaudited condensed consolidated financial statements for the second quarter ended 31 March 2025. This report offers a crucial glimpse into the company’s operational health and strategic direction.
The core takeaway from this quarter’s report is a mixed bag of results: while the company managed to significantly reduce its quarterly losses compared to the previous year, it faced a notable decline in revenue. The completion of its private placement is a key development, providing much-needed capital. Let’s break down the numbers and what they mean for Kanger’s journey ahead.
Core Data Highlights: A Closer Look at Kanger’s Performance
Kanger International Berhad’s second quarter of the financial year ending 30 September 2025 (Q2 2025) reveals a challenging revenue environment but also some positive shifts in managing expenses.
Quarterly Performance (Q2 2025 vs. Q2 2024)
For the individual quarter ended 31 March 2025, Kanger saw a significant reduction in its losses, despite a dip in revenue when compared to the same period last year.
Q2 2025
Revenue: RM7,419k
Gross Profit: RM157k
Loss Before Taxation: RM(290)k
Loss After Taxation: RM(290)k
Basic Loss Per Share: (0.03) sen
Q2 2024
Revenue: RM9,969k
Gross Profit: RM1,985k
Loss Before Taxation: RM(727)k
Loss After Taxation: RM(727)k
Basic Loss Per Share: (0.26) sen
Revenue for Q2 2025 decreased by RM2,550k, or approximately 26%, to RM7,419k compared to RM9,969k in Q2 2024. This was primarily attributed to a decrease in sales from the trading of building materials, which also led to a substantial 92% decline in gross profit.
However, the silver lining is the noticeable improvement in profitability. Kanger recorded a Loss Before Taxation of RM(290)k in Q2 2025, a 60% reduction in loss compared to RM(727)k in Q2 2024. This improvement in the bottom line was mainly due to lower operating expenses incurred in the current quarter.
Basic Loss Per Share also saw a significant improvement, moving from (0.26) sen in Q2 2024 to (0.03) sen in Q2 2025. This improvement, despite the absolute loss, is partly influenced by the increase in the weighted average number of ordinary shares in issue due to the private placement.
Cumulative Performance (6 Months FY2025 vs. 6 Months FY2024)
Looking at the cumulative six-month period ended 31 March 2025, the picture shows a more pronounced decline in overall performance compared to the previous year’s cumulative period.
6M FY2025
Revenue: RM15,583k
Gross Profit: RM485k
Loss Before Taxation: RM(696)k
Loss After Taxation: RM(696)k
Basic Loss Per Share: (0.08) sen
6M FY2024
Revenue: RM30,660k
Gross Profit: RM4,912k
Loss Before Taxation: RM(80)k
Loss After Taxation: RM(80)k
Basic Loss Per Share: (0.28) sen
For the cumulative six months, revenue dropped by RM15,077k, or 49%, to RM15,583k. Gross profit also declined sharply by 90% to RM485k. Consequently, the cumulative Loss Before Taxation widened significantly to RM(696)k, a substantial increase in losses compared to RM(80)k in the same period last year.
Despite the increase in overall loss, the Basic Loss Per Share for the cumulative period improved from (0.28) sen to (0.08) sen. This is primarily due to the higher weighted average number of shares in issue following the private placement, which dilutes the loss across a larger share base.
Quarter-on-Quarter Comparison (Q2 2025 vs. Q1 2025)
Comparing the current quarter with the immediate preceding quarter (Q1 2025), Kanger showed some sequential improvement in managing its losses.
Q2 2025
Revenue: RM7,419k
Gross Profit: RM157k
Loss Before Taxation: RM(290)k
Loss After Taxation: RM(290)k
Q1 2025
Revenue: RM8,164k
Gross Profit: RM328k
Loss Before Taxation: RM(406)k
Loss After Taxation: RM(406)k
Revenue decreased by 9% quarter-on-quarter, from RM8,164k in Q1 2025 to RM7,419k in Q2 2025, with gross profit also falling by 52%. However, the company managed to reduce its Loss Before Taxation from RM(406)k in Q1 2025 to RM(290)k in Q2 2025, a 29% improvement, mainly due to lower operating expenses.
Financial Health: Balance Sheet and Cash Flow
As of 31 March 2025, Kanger’s balance sheet showed total assets of RM226,385k, a slight decrease from RM228,293k as of 30 September 2024. Total shareholders’ equity saw a modest increase to RM215,826k from RM212,119k, while total liabilities decreased to RM10,559k from RM16,174k. Net assets per share, however, declined to 25.61 sen from 27.85 sen.
A critical area to watch is the cash position. Cash and cash equivalents stood at a very low RM81k at the end of the quarter, a significant drop from RM3,274k at the end of September 2024. The company’s operations continued to use cash, with a net cash outflow of RM7,590k from operating activities for the six-month period, which is higher than the RM6,862k used in the same period last year. While financing activities, largely driven by the private placement, generated RM4,403k, it wasn’t enough to fully offset the operational cash burn, leading to a net decrease in cash and cash equivalents of RM3,193k.
Risk and Prospect Analysis: Navigating the Future
Kanger’s future prospects are intertwined with the broader Malaysian economic outlook and its strategic initiatives. Bank Negara Malaysia (BNM) projects Malaysia’s economy to grow between 4.5% – 5.5% in 2025, driven by robust domestic demand, improving labor market conditions, and a stronger tourism sector. Government projects from Budget 2023 and ongoing large-scale infrastructure developments are expected to further bolster private investment, projected to expand by 5.5% in 2025.
However, the company acknowledges external risks, primarily from weaker-than-expected global growth stemming from tighter global financial markets or worsening sentiments. Despite these external headwinds, BNM maintains a balanced view on Malaysia’s growth projections.
In response to the market environment, Kanger is actively pursuing several growth initiatives:
- Construction Segment Expansion: The Group is focused on expanding its construction business through both organic growth and non-organic means, aiming to improve its financial performance in the long term.
- Property Investment & Management: Kanger is continuously seeking suitable and viable acquisition opportunities in strategic locations to grow its property investment and management portfolio.
The Board remains cautiously optimistic about the Group’s prospects for the financial year ending 30 September 2025.
Recent Corporate Developments
Kanger has been active on the corporate front, with several proposals underway or recently completed:
- Proposed Capital Reduction: An application has been filed with the High Court in relation to a proposed reduction of the company’s issued share capital.
- Proposed Variation to SPA: The company announced a proposed variation to the terms of a sales and purchase agreement for the acquisition of 126 service apartments in Genting Highlands.
- Private Placement Completion: Crucially, the second tranche of the private placement, involving 122,316,274 new ordinary shares at RM0.036 per share, was completed on 17 December 2024, raising RM4,403,386. These proceeds are being utilized for the Ijok development and general working capital purposes, which is vital given the current cash position.
It’s important to note that no dividends were paid or declared for the financial period ended 31 March 2025.
Summary and
Kanger International Berhad’s Q2 2025 report presents a nuanced picture. While the company successfully reduced its quarterly losses through expense management, the continued decline in revenue, both quarter-on-quarter and compared to the same period last year, remains a concern. The low cash balance highlights the importance of the recently completed private placement in shoring up working capital.
Key points to consider:
- Revenue Challenges: The significant drop in revenue from building materials trading indicates ongoing market softness in this segment.
- Cost Management: The ability to reduce quarterly losses by controlling expenses is a positive sign of operational discipline.
- Cash Position: The very low cash balance underscores the criticality of cash flow management and the funds raised from the private placement.
- Strategic Focus: The company’s stated focus on expanding its construction and property investment segments aligns with the positive outlook for Malaysian domestic demand and infrastructure development.
- Share Dilution: While basic loss per share improved, it’s partly due to the increased share count from the private placement, which investors should be aware of.
Moving forward, Kanger’s ability to execute its strategic initiatives, particularly in the construction and property sectors, will be key to reversing the revenue trend and achieving sustainable profitability. The cautious optimism from the Board reflects the current market realities and the efforts being made to reposition the company for future growth.
What are your thoughts on Kanger International Berhad’s latest performance? Do you think their strategic shifts in construction and property will be enough to turn the tide? Share your insights in the comments below!
