Core Data Highlights: A Mixed Bag of Results

Industronics Berhad’s third quarter of the financial year 2025 presented a complex picture, with a sharp decline in revenue but a narrowing of cumulative losses. Let’s break down the key figures:

Revenue Performance: A Steep Decline

The current quarter saw a dramatic drop in revenue, primarily attributed to the luxury watch segment in Hong Kong. This reflects broader economic and consumer sentiment downturns, particularly from mainland China tourists.

Looking at the year-to-date figures, the trend of reduced sales is also evident:

Profitability: Navigating Losses

The company continued to record a loss before tax in the current quarter, although the cumulative loss for the year-to-date period has improved compared to the previous year. This quarter’s loss was also impacted by an unrealised foreign exchange loss.

Earnings per Share (EPS)

The basic loss per share remained unchanged for the current quarter compared to the preceding year, while the year-to-date basic loss per share saw an improvement.

Business Unit Performance: A Closer Look

The segmental report sheds light on the performance drivers. For the year-to-date period, 93% of the revenue was contributed by the Hong Kong subsidiary, primarily through the trading of luxury watches. However, this segment also experienced the most significant revenue decline. Meanwhile, the Malaysian operations, encompassing electronics & system integration and food & beverage, contributed a smaller portion of the revenue.

Here’s a snapshot of the revenue by segment for the cumulative nine months:

Financial Health: Balance Sheet and Cash Flow

As of 31 March 2025, Industronics Berhad’s total assets stood at RM 78.72 million, a slight increase from RM 78.16 million as of 30 June 2024. Total liabilities also increased to RM 53.17 million from RM 48.51 million over the same period. Shareholder funds saw a reduction from RM 29.66 million to RM 25.55 million.

A notable highlight from the cash flow statement is the significant boost in cash and cash equivalents, which jumped from RM 67,309 at the beginning of the year to RM 1,257,239 by the end of the quarter. This positive change was largely driven by a RM 7.0 million proceeds from the disposal of an asset held for sale, completed in January 2025. This strategic move provided a much-needed injection of liquidity, offsetting the operating cash outflow.

Risk and Prospect Analysis: Adapting to a Dynamic Environment

The Board of Directors acknowledges the challenging business environment for the financial year 2025, particularly for the watch trading segment in Hong Kong. The direct spillover effect of the economic and consumer sentiment downturn in mainland China on Hong Kong’s luxury retail sector remains a significant headwind.

Despite these challenges, Industronics Berhad is not standing still. The company is actively pursuing diversification strategies to mitigate risks and unlock new growth avenues. Two key initiatives were highlighted:

• Mojoe F&B Restaurant Launch: This new venture in Malaysia signifies the Group’s entry into the food and beverage sector, aiming to tap into new consumer markets.
• Pulau Langkawi Project Management Contract: Securing a contract for a hotel and golf course development in Pulau Langkawi marks an important step in expanding its project management capabilities and diversifying its income streams beyond traditional segments.

These strategic shifts demonstrate the Group’s commitment to strengthening its operations and seeking new opportunities amidst a tough market. The focus is on adapting strategies to improve overall performance and enhance shareholder value.