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Hello, fellow investors and market watchers! Today, we’re diving deep into the latest quarterly report from a company that has seen some significant shifts in its performance. This report reveals a challenging period, marked by a sharp decline in revenue and a swing to a loss position. Let’s break down the numbers and understand what’s truly happening behind the scenes.
The company recorded a substantial 73.93% drop in revenue for the third quarter ended 31 March 2025 compared to the same period last year, swinging from a profit to a significant loss before tax.
Decoding the Latest Financial Performance
The third quarter of the financial year ending 31 March 2025 presented a tough landscape for the Group. Both revenue and profitability saw considerable contractions when compared to the corresponding quarter of the previous year. This downturn was primarily driven by lower progress billings from property development projects nearing completion and a decline in sales volume within the manufacturing and trading divisions due to subdued market demand.
Quarterly Performance Snapshot (Q3 FY2025 vs Q3 FY2024)
Revenue
Current Quarter: RM 8,776,000
Previous Year Corresponding Quarter: RM 33,665,000
Change: -73.93%
Profit / (Loss) Before Tax
Current Quarter: RM (1,779,000)
Previous Year Corresponding Quarter: RM 8,279,000
Change: -1214.39%
Net Profit / (Loss)
Current Quarter: RM (1,848,000)
Previous Year Corresponding Quarter: RM 6,441,000
Change: -1287.49%
Basic Earnings Per Share
Current Quarter: (0.26) sen
Previous Year Corresponding Quarter: 1.34 sen
Change: -119.40%
The shift from a significant profit to a loss highlights the severe impact of the reduced business activities across its core segments.
Year-to-Date Performance (9 Months FY2025 vs 9 Months FY2024)
Revenue
Current Period: RM 49,194,000
Previous Period: RM 79,994,000
Change: -38.50%
Profit / (Loss) Before Tax
Current Period: RM 1,569,000
Previous Period: RM 7,746,000
Change: -79.75%
Net Profit / (Loss)
Current Period: RM (43,000)
Previous Period: RM 5,422,000
Change: -100.79%
(from profit to slight loss)
Basic Earnings Per Share
Current Period: 0.07 sen
Previous Period: 1.04 sen
Change: -93.27%
On a cumulative nine-month basis, the trend is similar, with substantial declines across all key financial metrics, culminating in a slight net loss for the period.
Segmental Performance Breakdown
Let’s look closer at how each business segment contributed to the overall performance:
| Segment | Revenue (3M FY2025) | Revenue (3M FY2024) | PBT (3M FY2025) | PBT (3M FY2024) |
|---|---|---|---|---|
| Manufacturing | RM 6,202,971 | RM 13,252,397 | RM (973,687) | RM 366,362 |
| Trading | RM 870,945 | RM 3,598,520 | RM 2,154 | RM 135,066 |
| Property Development | RM 626,000 | RM 15,919,090 | RM (707,112) | RM 8,028,168 |
| Rental/Others | RM 1,076,592 | RM 894,948 | RM (100,855) | RM (250,031) |
The property development segment experienced the most dramatic drop in revenue and swung to a loss, largely due to the completion of key projects like The Sky Projects at ALMA, Bukit Mertajam, and Marminton Homes at Raja Uda, Butterworth. Both the manufacturing and trading divisions also faced significant revenue declines and profitability challenges, attributed to weak market demand.
Financial Health: Balance Sheet and Cash Flow
As of 31 March 2025, the Group’s total assets increased by 6.21% to RM 474.58 million from RM 446.82 million as at 30 June 2024. Total equity also saw a modest increase of 2.24% to RM 430.82 million. However, total liabilities increased significantly by 71.91% to RM 43.77 million, mainly driven by an increase in other payables.
The cash flow statement reveals a concerning trend. Net cash from operating activities for the nine months ended 31 March 2025 turned negative, showing a cash outflow of RM 3.08 million, a stark contrast to the RM 81.60 million cash inflow in the same period last year. This indicates that the core operations are no longer generating sufficient cash, which could put pressure on liquidity if not addressed. Overall, cash and cash equivalents at the end of the period decreased to RM 34.32 million from RM 45.21 million at the beginning of the period.
Risks and Future Prospects
The Board of Directors acknowledges the challenging local business environment, particularly for the manufacturing and trading of steel products. Volatile steel prices, a slowing global economy, and external uncertainties, including potential US policy shifts and tariff increases, continue to pose significant headwinds.
Conversely, the property market in Penang is expected to remain resilient, buoyed by strong economic fundamentals and ongoing infrastructure projects such as the Penang LRT and Silicon Island development. These projects are anticipated to enhance long-term value, and areas with improved connectivity and affordable housing projects are experiencing steady demand, especially from factory workers and young families.
To navigate these challenges, the Group is focused on efficient operating cost management, with the expectation that this will contribute to a positive performance for the financial year ending 30 June 2025.
Summary and
The latest quarterly report highlights a challenging period for the Group, primarily driven by the completion of major property projects and a weak market demand impacting its manufacturing and trading segments. The significant decline in revenue and the swing to a net loss for both the quarter and year-to-date figures are clear indicators of the headwinds faced. While the property segment holds some promise with ongoing infrastructure developments in Penang, the broader economic uncertainties and volatile steel prices continue to weigh on the Group’s traditional businesses. The shift to negative cash flow from operations is a key area to monitor, as it indicates a potential strain on operational liquidity.
Furthermore, a very significant development mentioned in the report is the issuance of freezing orders by the police (PDRM) in relation to an ongoing investigation. This is a material event that introduces a considerable layer of uncertainty and potential risk that shareholders and prospective investors must be aware of.
Key risk points to consider:
- Sharp decline in revenue and profitability across core segments.
- Negative cash flow from operating activities, signaling operational challenges.
- Volatile steel prices and weak market demand impacting manufacturing and trading.
- The ongoing investigation and freezing orders by PDRM, which could have unforeseen impacts on operations and reputation.
- Reliance on future infrastructure projects to spur property demand.
The Group’s strategy to manage operating costs efficiently is crucial, but the external environment and the recent legal development present a complex picture.
What are your thoughts on the Group’s performance and its strategy moving forward, especially in light of the challenging market conditions and the legal development? Do you believe their focus on cost management will be enough to steer them through these turbulent times?
Share your insights in the comments section below!
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