Financial Performance: A Closer Look

XOX BHD’s financial results for the second quarter and year-to-date period ended 31 March 2025 showcase a mixed but generally improving picture, particularly in terms of loss reduction. Let’s dive into the core numbers:

Quarterly Performance (Q2 2025 vs. Q2 2024)

The current quarter saw a notable improvement in profitability metrics, even as revenue continued its upward trend.

Revenue for the current quarter increased by 4% to RM63.81 million, up from RM61.46 million in the same quarter last year. This growth was primarily fueled by the successful launch of an enhanced postpaid plan, which improved customer acquisition and retention, along with effective consumer campaigns.

A significant highlight is the remarkable 88% reduction in Loss Before Tax (LBT) for the quarter, shrinking from RM20.27 million to RM2.39 million. This dramatic improvement is attributed to better revenue performance and, crucially, a one-off gain of RM11.76 million from the dilution of equity interest in non-performing subsidiaries. This strategic move indicates a focused effort to streamline the company’s portfolio and reduce drag from underperforming assets.

Year-to-Date Performance (YTD 31 March 2025 vs. YTD 31 March 2024)

The year-to-date figures reinforce the positive trajectory in revenue and loss reduction.

For the six-month period, revenue grew by 2% to RM125.97 million. The year-to-date LBT also saw a significant 41% reduction, moving from RM39.35 million last year to RM23.41 million this year, reflecting consistent execution of value-driven offerings and customer-centric strategies.

Quarter-on-Quarter Performance (Q2 2025 vs. Q1 2025)

Comparing the current quarter to the immediate preceding quarter shows continued operational improvements.

Revenue increased by 3% quarter-on-quarter, underscoring the sustained positive impact of strategic initiatives. The LBT improved dramatically from RM21.02 million in Q1 2025 to RM2.40 million in Q2 2025, an 89% reduction. This was again bolstered by higher revenue and the aforementioned one-off gain.

Basic Loss Per Share: A Nuanced View

While the overall losses have significantly decreased, the Basic Loss Per Share (BLPS) figures require a closer look due to a substantial change in the weighted average number of ordinary shares. For the current quarter, BLPS was (1.57) sen compared to (0.39) sen in the same quarter last year. Similarly, year-to-date BLPS was (13.22) sen compared to (0.76) sen last year. This apparent increase in loss per share, despite reduced total losses, is primarily due to a significant reduction in the company’s share base following a capital reduction exercise that occurred between September and October 2024. Therefore, while the total loss incurred is considerably lower, it is now spread across a much smaller number of shares, leading to a higher loss per share value.

Segment Performance and Strategic Shifts

Understanding the performance of XOX BHD’s different business segments provides deeper insight into its overall financial health and strategic direction.

• Mobile Telecommunication Services: This core segment continues to be the primary revenue driver, showing growth both quarter-on-quarter and year-to-date. The segment also saw a reduction in its operating loss, indicating improved efficiency and the positive impact of strategic initiatives like enhanced postpaid offerings and prepaid-to-postpaid conversions.
• Investment Holding: This segment recorded a substantial increase in revenue and swung from a loss to a profit position. This is where the one-off gain from the dilution of equity interest in non-performing subsidiaries was primarily recognised, reflecting successful portfolio optimisation.
• Sports Segment: This segment experienced a decrease in revenue and an increase in loss year-to-date. Significantly, XOX BHD diluted its equity interest in XOX Pro Sport Sdn Bhd to 10% on March 20, 2025, causing it to cease being a subsidiary. This strategic divestment from a non-performing asset is a key contributor to the overall reduction in the Group’s losses and aligns with the strategy of optimising the investment portfolio.

The acquisition of the remaining 40% shareholding in One XOX Sdn Bhd on March 26, 2025, making it a 100% owned subsidiary, further solidifies XOX’s control over key operational assets and streamlines its business structure.

Financial Health and Cash Flow

Assessing the balance sheet and cash flow statements provides a holistic view of the company’s financial standing.

As at 31 March 2025, total assets stood at RM302.70 million, down from RM326.25 million as at 30 September 2024. Total equity attributable to owners of the Company also decreased to RM133.43 million from RM154.63 million in September 2024, impacting net assets per share which decreased from 89.37 sen to 71.95 sen.

From a cash flow perspective, the Group generated RM2.90 million from operating activities for the period ended 31 March 2025, a decrease compared to RM8.77 million in the preceding year. However, net cash used in investing activities significantly reduced to RM2.30 million (from RM14.13 million), indicating a more cautious approach to capital expenditure and investments. Net cash used in financing activities also decreased to RM1.12 million (from RM1.63 million). Overall, the net decrease in cash and cash equivalents was only RM0.52 million, a substantial improvement from the RM7.00 million decrease in the previous corresponding period, reflecting better cash management and reduced outflows from investing and financing activities.

Risks and Prospects: Navigating the Future

The telecommunications industry in Malaysia is a dynamic landscape, presenting both immense opportunities and formidable challenges for players like XOX BHD.

Opportunities: The sector is poised for significant growth, driven by the ongoing adoption of 5G technology, the expansion of digital services, and continuous technological innovation. These trends open new avenues for revenue generation and service diversification.

Challenges: However, the industry is not without its hurdles. Fierce competition, particularly in a market with high saturation, puts constant pressure on pricing and customer retention. Regulatory complexities add another layer of challenge, requiring companies to adapt swiftly to evolving policies. Furthermore, addressing the infrastructure gap between urban and rural areas remains a critical task for the industry as a whole.

XOX’s Strategy: Despite these challenges, XOX BHD maintains a cautiously optimistic outlook. The company is actively expanding its focus beyond traditional mobile services, aiming to forge stronger connections with its subscribers through enhanced digital offerings. A key part of its strategy involves leveraging cutting-edge technologies, such as Artificial Intelligence (AI), to optimise operations and proactively address potential customer churn. By focusing on innovation, making strategic investments (as seen in its recent portfolio adjustments), and prioritising sustainable development, XOX aims to solidify its position as a foundational pillar of Malaysia’s digital economy.