Hello fellow investors and market watchers!
Today, we’re diving into the latest financial pulse check for
, a prominent player in Malaysia’s ceramic industry, as they unveil their first-quarter results for the period ended 31 March 2025. This report offers a candid look at the company’s performance amidst a challenging market landscape, highlighting both the hurdles faced and the strategic maneuvers underway. While the numbers reflect a tough quarter, it’s crucial to understand the underlying factors and White Horse Berhad’s outlook.
Let’s break down the key figures and insights from this report to get a clearer picture of where the company stands.
Core Financial Performance: A Challenging Quarter
The first quarter of 2025 proved to be a challenging one for White Horse Berhad, with a notable decline in both revenue and gross profit, leading to an increased loss before tax. This performance is primarily attributed to
.
Q1 2025
Revenue: RM 89.70 million
Gross Profit: RM 8.75 million
Loss Before Tax: RM (8.49) million
Q1 2024
Revenue: RM 106.54 million
Gross Profit: RM 13.58 million
Loss Before Tax: RM (3.01) million
Compared to the same period last year, revenue saw a
, while gross profit plummeted by
. Consequently, the loss before tax widened significantly by
. The company also noted that the first quarter is typically slower due to festive seasons, a norm that often sees business picking up in subsequent quarters.
Segmental Insights: Mixed Performance Across Geographies
White Horse Berhad’s operations span across Malaysia, Vietnam, and other ASEAN regions including China. The Malaysia segment primarily handles manufacturing and distribution, while Vietnam and Other operations are focused solely on distribution.
| Segment (RM ‘000) | Q1 2025 External Sales | Q1 2024 External Sales | Q1 2025 (Loss) / Profit Before Tax | Q1 2024 (Loss) / Profit Before Tax |
|---|---|---|---|---|
| Malaysia Operation | 78,694 | 95,985 | (8,586) | (3,534) |
| Vietnam Operation | 27 | 127 | 525 | 687 |
| Other Operation | 10,982 | 10,424 | (430) | (164) |
| Total Group | 89,703 | 106,536 | (8,491) | (3,011) |
The Malaysian segment, which contributes the bulk of the revenue, experienced a significant drop in sales and an increased loss. The Vietnam operation, though small, remained profitable but saw a decline in sales and profit. The “Other” segment showed an increase in sales but also widened its loss before tax. The cessation of operations for PT. WH Ceramic Indonesia (WHIN) in January 2020, currently undergoing voluntary liquidation, is expected to positively contribute to the Group’s bottom line in the long run due to cost-saving measures, despite its insignificant impact on current results.
Financial Health: Managing Liquidity and Debt
A closer look at the balance sheet reveals the company’s financial position:
As at 31 Mar 2025
Cash and Cash Equivalents: RM 75.88 million
Total Borrowings: RM 71.99 million
As at 31 Mar 2024
Cash and Cash Equivalents: RM 93.14 million
Total Borrowings: RM 92.55 million
While cash and cash equivalents saw a decrease, a positive development is the
compared to the same period last year. This indicates a proactive approach to debt management, which is crucial in a high-cost environment. The borrowings are primarily secured and based on floating interest rates, with a weighted average interest rate of approximately 5.5% per annum.
Risks and Prospects: Navigating the Headwinds
White Horse Berhad acknowledges that its business is closely tied to the construction and renovation industries, serving both property development and replacement sectors in local and export markets.
The company explicitly states that business operations remain challenging due to:
- Stiff market competitiveness
- Pricing strategy pressures
- Marketing structure challenges
- Fluctuations in foreign currencies
- High production and operating costs
These factors collectively have a significant impact on the Group’s profitability. To counter these challenges, White Horse Berhad is implementing several strategic measures:
- Enhancing manufacturing efficiency and productivity
- Developing new products
- Implementing stringent cost-control measures
- Undertaking market restructuring initiatives
These strategies aim to bolster the company’s resilience and improve its competitive edge in the long run.
Summary and
White Horse Berhad’s Q1 2025 results underscore the challenging operating environment, marked by intense competition and elevated costs. The decline in revenue and increased loss before tax are direct reflections of these market pressures. However, the company is not passive; it is actively pursuing strategies to enhance efficiency, control costs, and innovate, which are crucial steps for navigating the current landscape.
Key risk points highlighted in the report that warrant close attention include:
- Intensifying market competition affecting pricing power.
- High production and operating costs impacting profitability.
- Fluctuations in foreign exchange rates, especially for unhedged USD borrowings.
- Dependence on the cyclical construction and renovation industries.
The reduction in borrowings is a positive sign of prudent financial management. As the company moves through the year, the effectiveness of its counter-measures in improving efficiency and controlling costs will be key to its performance. Investors will be keen to see if the traditional seasonal upturn in subsequent quarters, combined with these strategic initiatives, can help White Horse Berhad turn the tide.
What are your thoughts on White Horse Berhad’s Q1 2025 performance? Do you believe their strategic counter-measures will be sufficient to navigate the challenging market conditions ahead? Share your insights in the comments below!
