Q4 FY2025 Financial Highlights: A Turn Towards Reduced Losses

AIZO GROUP BERHAD’s Q4 FY2025 report reveals a mixed, yet ultimately more positive picture compared to the previous year. While revenue saw a slight dip, the Group managed to significantly narrow its losses, demonstrating improved operational efficiency.

Comparing Q4 FY2025 with the same quarter last year (Q4 FY2024):

• Revenue saw a marginal decrease of 0.67%, moving from RM32.36 million to RM32.15 million.
• Crucially, Loss Before Tax was significantly reduced by 48.2%, from RM6.57 million to RM3.40 million. This indicates a strong improvement in managing operational costs and profitability at the pre-tax level.
• Similarly, Loss After Tax narrowed by 43.0%, from RM6.60 million to RM3.76 million.
• Basic Loss Per Share also improved by 45.5%, from (0.33 sen) to (0.18 sen), reflecting the reduced losses on a per-share basis.

On a quarter-on-quarter basis, comparing Q4 FY2025 with the immediate preceding quarter (Q3 FY2025), the Group’s revenue increased by 4.29% to RM32.15 million, driven by new project commencements and higher demand in certain segments. However, the loss before tax increased by 118.6% to RM3.40 million from RM1.55 million in Q3 FY2025, primarily due to an impairment exercise. Despite this, the Group recorded a positive adjusted EBITDA of RM2.00 million for the quarter, signaling underlying operational health.

Performance Across Business Segments

A closer look at the individual segments reveals where the Group is finding its footing:

• Civil Engineering: Revenue for the quarter decreased slightly to RM21.86 million (Q4 FY2024: RM22.91 million), primarily due to a temporary revision in production planning at a key client site. However, the segment’s operating loss significantly narrowed to RM0.05 million from RM1.71 million, indicating better cost control. On a sequential basis, revenue increased due to newly secured projects.
• Bituminous Products: This segment showed robust growth, with revenue increasing to RM8.42 million (Q4 FY2024: RM7.59 million) and swinging to an operating profit of RM0.71 million from a loss of RM0.31 million. This was largely driven by increased demand for raw bitumen trading and coating enamel products.
• Services: This segment recorded no revenue for the current quarter, resulting in an operating loss of RM0.71 million.
• Energy: A standout performer, this segment saw revenue increase to RM1.85 million (Q4 FY2024: RM1.78 million) and turned profitable with an operating profit of RM0.54 million from a loss of RM2.18 million. Improved plant availability was a key factor in this growth.

Financial Health Check: Balance Sheet and Cash Flow

As at 31 March 2025, AIZO GROUP BERHAD’s financial position shows signs of strengthening:

• Total Assets increased to RM172.02 million from RM164.64 million a year ago.
• Total Equity attributable to owners of the parent grew to RM98.10 million from RM88.93 million, indicating an improved shareholder value.
• Notably, Cash and Bank Balances surged to RM24.68 million from RM15.23 million, providing a healthier liquidity position.

From a cash flow perspective, the Group used RM5.82 million in operating activities for the 12 months ended 31 March 2025, compared to generating RM16.51 million in the preceding year. This shift primarily reflects changes in working capital. However, net cash generated from financing activities saw a significant boost to RM20.21 million (from RM8.38 million last year), largely due to the issuance of new shares, which helped bolster the overall cash position.

Risks and Prospects: Navigating the Macroeconomic Tides and Seizing Opportunities

The operating environment for AIZO GROUP BERHAD is shaped by broader economic trends. Malaysia’s economy registered a GDP growth of 5.0% in Q4 2024, supported by household spending, robust investment, and higher exports. Key sectors like Services, Manufacturing, and Construction showed improvement. While inflation moderated, it remains a factor to monitor.

Against this backdrop, AIZO’s strategic focus remains on improving operational efficiency across its core segments: civil works, bituminous product manufacturing, and renewable energy. The Group is committed to vigilant management of capital expenditure and exploring strategic ventures.

A Glimpse into the Future: The Solar Power Leap

A significant development that underscores AIZO’s future prospects is the advancement in its energy segment. Wawasan Demi Sdn Bhd (WDSB), a subsidiary, has perfected a Power Purchase Agreement (PPA) with Tenaga Nasional Berhad (TNB) for the development of a Large Scale Solar Photovoltaic (LSS) Plant in Kampar, Perak, with an export capacity of 99.99 MW. This is a monumental step, signaling a strong commitment to renewable energy and potentially providing a stable, long-term revenue stream for the Group.

Ongoing Material Litigation

It’s important to note the ongoing material litigation involving Optimis Dinamik Sdn Bhd (ODSB), a subsidiary. The High Court has ruled in ODSB’s favor regarding unlawful contract termination, with damages to be assessed. The Federal Court has also dismissed an appeal against this decision. While there is a counterclaim to be set off, the overall ruling is favorable to ODSB, and the assessment of damages is ongoing. This situation represents a contingent asset that, once finalized, could positively impact the Group’s financials.