Financial Performance Overview: A Closer Look at the Numbers

MTAG Group’s financial results for Q3 FY2025 show a decline in key metrics when compared to the same period last year, reflecting a softer market demand. However, a sequential improvement from the previous quarter indicates potential stabilization.

Quarter-on-Quarter (QoQ) Performance (Q3 FY2025 vs Q3 FY2024)

For the three months ended 31 March 2025, MTAG recorded a notable decrease in revenue and profit before tax (PBT) compared to the corresponding period last year.

This translates to a 28.7% decrease in revenue and a 19.5% drop in PBT. Net profit after tax (PAT) also saw a 5.3% decrease, leading to a basic earnings per share (EPS) of 0.70 sen, down from 0.74 sen previously.

Period-to-Date (YTD) Performance (9 Months FY2025 vs 9 Months FY2024)

Looking at the cumulative nine-month period, the trend of decline is more pronounced:

Revenue for the nine months decreased by 28.1%, and PBT declined by a significant 40.7%. PAT fell by 38.4%, with basic EPS at 1.56 sen compared to 2.53 sen in the previous year.

Sequential Quarter Performance (Q3 FY2025 vs Q2 FY2025)

Despite the year-on-year decline, there’s a positive sequential movement, indicating a recovery in the immediate past quarter:

Revenue increased by 7.8% and PBT by 26.1% compared to the immediate preceding quarter (Q2 FY2025). This was mainly driven by higher label sticker sales within the converting business segment.

Diving Deeper: Business Segments and Financial Health

Business Unit Performance

The core of MTAG’s operations lies in its converting business segment, which contributed approximately 77.5% of the total revenue in Q3 FY2025. The decline in overall revenue was primarily attributed to softer demand for mesh and label stickers within this segment, leading to a decrease from RM23.2 million to RM15.1 million in converting revenue for the quarter. The distribution segment, however, remained relatively stable.

Financial Position and Cash Flow

MTAG maintains a healthy financial position, with total assets increasing to RM240.66 million as at 31 March 2025, up from RM235.28 million at 30 June 2024. Total equity also saw a positive bump, reaching RM230.19 million (30 June 2024: RM220.17 million), contributing to an improved net assets per share of RM0.34 (30 June 2024: RM0.32).

A notable highlight in the balance sheet is the complete elimination of borrowings, standing at RM0 as of 31 March 2025, compared to RM0.38 million previously. This reflects a strong balance sheet management. While cash and bank balances saw a decrease to RM5.81 million, fixed deposits with licensed banks and other investments significantly increased to RM30.78 million and RM121.18 million respectively, indicating strategic asset allocation.

Cash flow from operating activities for the nine months stood at RM15.44 million, a decrease from RM19.70 million in the prior year, aligning with the lower profitability. The company utilized cash for investing activities, primarily for the purchase of property, plant, and equipment, demonstrating ongoing investment in its operational capabilities.

Dividend Policy

For the current financial quarter under review, the Board of Directors did not recommend any dividend.

Strategic Outlook and Navigating the Future

MTAG Group is keenly aware of the global economic uncertainties, particularly the impact of reciprocal tariffs. However, the company views these challenges as potential opportunities, anticipating that they could lead to transfer projects for Malaysian manufacturers. This forward-thinking approach suggests a readiness to capitalize on shifting global supply chains.

On the domestic front, the outlook is more optimistic. Malaysia continues to attract robust foreign direct investment (FDI), with a particular focus on the Southern region. MTAG is strategically positioned to benefit from this, actively monitoring developments in the Johor-Singapore Special Economic Zone (JS-SEZ) and engaging with existing and prospective investors. This proactive engagement could unlock new growth avenues for the company.

Supported by its healthy balance sheet and strong cash flow, MTAG is well-equipped to pursue strategic expansion initiatives. This financial strength provides the flexibility needed to invest in growth opportunities and navigate potential market fluctuations.

It’s also worth noting the amicable settlement of the claim against Jabco Filter System Sdn Bhd for RM2.2 million, which has now been fully cleared. This resolution removes a significant contingent liability and allows the company to focus on its core operations and strategic growth.