Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial report from HEXTAR HEALTHCARE BERHAD for the first quarter ended 31 March 2025. This report offers a candid look at the company’s performance amidst a challenging global economic landscape. While the numbers reflect a period of significant headwinds, especially in its core glove manufacturing business, there are also signs of strategic adjustments and future prospects that warrant our attention.
Let’s unpack the key figures and insights from this quarter’s performance.
Q1 2025 Performance: A Detailed Look
Hextar Healthcare faced a tough quarter, recording a net loss. This was primarily driven by lower sales revenue and increased operating costs, stemming from low capacity utilization in its manufacturing plants.
Revenue & Profit/Loss Highlights:
Q1 2025
Revenue: RM37.63 million
Loss After Tax: RM3.50 million
Basic Loss Per Share: (0.32) sen
Q1 2024 (Corresponding Period)
Revenue: RM40.32 million
Profit After Tax: RM0.63 million
Basic Earnings Per Share: 0.06 sen
Comparing the current quarter to the same period last year, revenue saw a decrease of RM2.7 million, or approximately 6.7%. The shift from a profit of RM0.63 million in Q1 2024 to a loss of RM3.50 million in Q1 2025 represents a decline of RM4.1 million in profitability.
Quarter-on-Quarter Improvement
Despite the year-on-year decline, it’s worth noting an improvement when comparing the current quarter’s performance to the immediate preceding quarter (Q4 2024).
Q1 2025
Loss After Tax: RM3.50 million
Q4 2024 (Preceding Quarter)
Loss After Tax: RM8.00 million
The loss after tax in Q1 2025 decreased by RM4.5 million, or 56.3%, compared to the RM8.0 million loss recorded in the preceding quarter. This improvement is attributed to the absence of a provision for inventories written down to net realizable values, which had impacted the previous quarter’s results. However, it was partially offset by a reversal of contingent consideration amounting to RM6.4 million in Q4 2024.
Segmental Performance Insights
Hextar Healthcare operates across three key segments: Gloves Operation, Medical Devices Operation, and Property Investment. Their individual performances paint a clearer picture of the overall results.
| Segment | Revenue (RM’000) | Segment Result (RM’000) |
|---|---|---|
| Gloves Operation | 35,827 | (3,992) |
| Medical Devices Operation | 1,799 | 171 |
| Property Investment | – | (208) |
The Gloves Operation remains the largest revenue contributor but also the primary source of the group’s loss. The Medical Devices Operation continues to be profitable, albeit contributing a smaller portion of the overall revenue. The Property Investment segment recorded a loss, as it is still in its developmental phase.
Financial Position and Cash Flow
As of 31 March 2025, Hextar Healthcare’s financial position shows slight changes compared to the end of 2024.
As at 31 March 2025
Total Assets: RM543.58 million
Total Equity: RM505.04 million
Net Asset Per Share: RM0.46
Cash & Bank Balances: RM6.36 million
As at 31 December 2024
Total Assets: RM539.13 million
Total Equity: RM508.07 million
Net Asset Per Share: RM0.46
Cash & Bank Balances: RM9.22 million
While total assets saw a marginal increase, total equity slightly decreased. The net asset per share remained stable at RM0.46. Cash and bank balances experienced a decline, reflecting the operational cash burn.
From a cash flow perspective, the Group continued to use cash in its operating activities (RM10.24 million net cash used). However, positive cash flow from financing activities (RM6.79 million) helped mitigate the overall decrease in cash and cash equivalents.
Risks and Future Prospects
The management of Hextar Healthcare has provided insights into the outlook for its various divisions:
- Gloves Division: This segment is expected to “remain challenging in the short to medium term.” The company points to global trade uncertainties, rising material prices, and increasing energy and labor costs as key headwinds. This indicates that the competitive and cost-intensive environment for glove manufacturers is likely to persist.
- Medical Devices Operation: The Group continues to focus on the manufacture and sales of diagnostics test kits for various infectious diseases. This segment appears to be a more stable contributor and a strategic area of focus for the company.
- Property Investment Division: A notable development is the expectation for this division to “commence operations by the fourth quarter of this year.” This could potentially introduce a new revenue stream and diversify the Group’s business portfolio, offering a glimmer of future growth beyond its current core operations.
The company has also fully utilized proceeds from its private placement exercises, with funds allocated towards working capital and future investments, including the property investment division and the purchase of property, plant, and equipment. This suggests ongoing efforts to strengthen its operational base and diversify its assets.
Summary and
Hextar Healthcare Berhad’s first quarter of 2025 reflects the ongoing difficulties in the global glove manufacturing sector. The company’s overall net loss is a clear indicator of these challenges, primarily stemming from reduced capacity utilization and higher operating costs. However, the sequential improvement in loss compared to the previous quarter suggests some operational stabilization or a reduction in one-off expenses.
The diversification into medical devices offers a more stable, albeit smaller, revenue stream. The upcoming commencement of the property investment division by Q4 2025 is a key development to watch, as it could provide a much-needed new avenue for growth and revenue generation. The Group’s strategic focus on managing costs and exploring new opportunities outside its traditional glove business will be crucial for its future performance.
Key points to monitor moving forward include:
- The persistent challenges and competitive landscape in the glove manufacturing industry.
- The successful launch and contribution of the property investment division.
- The continued stability and growth of the medical devices segment.
- The company’s ability to manage its operating costs and improve capacity utilization.
Hextar Healthcare is navigating a complex period, with its traditional strengths facing significant headwinds. The strategic shifts and diversification efforts will be key determinants of its trajectory in the coming quarters. How do you foresee Hextar Healthcare navigating these challenges and leveraging its diverse segments in the coming quarters?
Share your thoughts in the comments below!
