Hello, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of LTKM Berhad, a company known for its diversified interests spanning the poultry and property sectors. They’ve just released their Fourth Quarter and Full-Year financial results for the period ended 31 March 2025, and there’s quite a bit to unpack.
While the report reveals a challenging quarter with a dip in revenue and profit, it also underscores the company’s robust financial health and strategic pivots that could shape its future. Notably, despite the headwinds, LTKM has demonstrated resilience, maintaining a strong balance sheet and continuing its commitment to shareholder returns.
Let’s break down the key figures and see what this report tells us about LTKM’s journey and where it might be headed.
Core Data Highlights: A Closer Look at the Numbers
LTKM Berhad’s latest report presents a mixed bag of results, reflecting both operational challenges and strategic strengths. Let’s examine the performance for the quarter and the full financial year.
Fourth Quarter Performance (Q4 FY2025 vs. Q4 FY2024)
The final quarter saw a notable decline in revenue and gross profit, indicating a tougher operating environment compared to the same period last year. However, an increase in other income helped cushion the impact on the bottom line.
3 Months Ended 31 March 2025
Revenue: RM 51,976,000
Gross Profit: RM 4,761,000
Other Income: RM 11,899,000
Profit Before Tax: RM 12,407,000
Profit Net of Tax: RM 12,614,000
Basic Earnings Per Share: 8.81 sen
3 Months Ended 31 March 2024
Revenue: RM 61,273,000
Gross Profit: RM 12,472,000
Other Income: RM 9,973,000
Profit Before Tax: RM 17,467,000
Profit Net of Tax: RM 17,855,000
Basic Earnings Per Share: 12.48 sen
Revenue for the quarter decreased by approximately 15.2% to RM 51.98 million from RM 61.27 million in the previous year’s corresponding quarter. This led to a significant 61.8% drop in gross profit. However, a commendable 19.3% increase in other income, likely stemming from investment activities, helped mitigate the decline in overall profitability. Consequently, profit before tax saw a 29.0% reduction, and profit net of tax decreased by 29.4%.
Full-Year Performance (FY2025 vs. FY2024)
The full financial year also reflects a challenging period, with overall revenue and profit seeing a reduction. Despite this, the company’s ability to generate significant other income remains a key highlight.
12 Months Ended 31 March 2025
Revenue: RM 222,066,000
Gross Profit: RM 28,320,000
Other Income: RM 42,037,000
Profit Before Tax: RM 51,642,000
Profit Net of Tax: RM 48,493,000
Basic Earnings Per Share: 33.88 sen
12 Months Ended 31 March 2024
Revenue: RM 257,686,000
Gross Profit: RM 44,384,000
Other Income: RM 37,842,000
Profit Before Tax: RM 64,639,000
Profit Net of Tax: RM 58,565,000
Basic Earnings Per Share: 40.92 sen
For the full financial year, revenue declined by 13.8% to RM 222.07 million, and gross profit fell by 36.2%. However, the company successfully grew its other income by 11.1% to RM 42.04 million, which significantly contributed to the overall profit. Despite this, full-year profit before tax decreased by 20.2%, and profit net of tax saw a 17.2% reduction. This indicates that while the core business faced challenges, the company’s diversified income streams played a crucial role in maintaining profitability.
Financial Health: A Solid Foundation
Beyond the income statement, LTKM Berhad’s balance sheet paints a picture of financial strength and prudent management. As of 31 March 2025, the company’s total assets stood at RM 415.13 million, an increase from RM 389.01 million a year ago. This growth was primarily driven by an increase in non-current assets, particularly in investment securities and property, plant and equipment.
The company’s total equity also saw a healthy rise to RM 331.18 million from RM 285.95 million, reflecting a strong financial position and increased shareholder value. Importantly, total liabilities decreased significantly to RM 83.95 million from RM 103.06 million, indicating effective debt management and a reduction in overall financial obligations. This improvement in the debt-to-equity ratio is a positive sign for financial stability.
Cash Flow: Sustained Operations and Strategic Investments
LTKM’s cash flow statement reveals a company that continues to generate healthy cash from its operations, even amidst challenging times. For the full year, net cash generated from operating activities amounted to RM 40.84 million, a slight decrease from RM 49.19 million in the previous year but still a substantial figure.
The company continued to actively invest, with RM 36.10 million used in investing activities, primarily for the purchase of investment securities and property, plant and equipment. This suggests a continued focus on growth and portfolio diversification. In terms of financing, a net cash outflow of RM 22.18 million was recorded, largely due to dividends paid to shareholders, reinforcing the company’s commitment to returning value.
Risks and Prospects: Navigating the Future
LTKM Berhad operates in dynamic sectors, and its future performance will be influenced by several factors. While the latest report shows a dip in core business revenue, the company’s strategic diversification appears to be a key element in its resilience.
The poultry industry, a significant part of LTKM’s traditional business, often faces volatility due to fluctuating feed costs, disease outbreaks, and market demand. The decline in revenue suggests potential headwinds in this segment. However, the substantial increase in “other income” points to the growing contribution of its property and investment portfolio. This diversification is a prudent strategy to mitigate risks associated with any single business unit.
Looking ahead, the company’s strong balance sheet, coupled with its consistent cash generation from operations, provides a solid foundation for future growth and strategic initiatives. The continued investment in securities and properties suggests a long-term vision to build stable, recurring income streams. The ability to reduce overall liabilities also positions LTKM well to weather potential economic uncertainties.
Dividends: Returning Value to Shareholders
For the financial year ended 31 March 2025, LTKM Berhad paid out dividends totaling RM 20.04 million. This demonstrates the company’s ongoing commitment to providing returns to its shareholders, even as it navigates a period of revenue and profit adjustments.
Summary and
In conclusion, LTKM Berhad’s latest financial report paints a picture of a company facing operational headwinds in its core business but demonstrating strong financial health and strategic foresight through diversification. While the decline in revenue and profit for both the quarter and full year is a concern, the significant contribution from other income streams and a robust balance sheet underscore the company’s resilience.
The reduction in overall liabilities and continued investment in growth areas highlight a proactive management approach. The company’s ability to generate healthy operating cash flows and its commitment to paying dividends further reinforce its stable financial footing.
Key points from the report include:
- Revenue Decline: Both quarterly and full-year revenue saw a decrease, suggesting challenges in the core business segments, likely the poultry division.
- Profitability Impact: Gross profit was significantly affected, though increased “other income” helped to partially offset the impact on net profit.
- Strong Financial Position: A healthy balance sheet with increasing assets, growing equity, and decreasing liabilities indicates robust financial stability.
- Strategic Diversification: The growing contribution from investment properties and securities points to a successful diversification strategy.
- Shareholder Returns: The company continued to pay dividends, reflecting its commitment to shareholders despite the challenging environment.
What are your thoughts on LTKM Berhad’s performance? Do you believe their diversification strategy will continue to buffer them against industry challenges, or do you foresee further headwinds for their traditional business? Share your insights in the comments below!
