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Navigating the currents of a dynamic economy, Malaysian companies continue to adapt and evolve. Today, we’re diving into the first-quarter results for 2025 from PRG Holdings Berhad, a diversified group with interests spanning property, manufacturing, energy efficiency, and agriculture. This report offers a fascinating glimpse into their performance, revealing both challenges and bright spots amidst global uncertainties.
While the company experienced a slight dip in overall revenue, a notable increase in profit before tax signals strategic resilience. Let’s unpack the numbers and explore what’s driving PRG Holdings Berhad’s journey in the first quarter of 2025.
Q1 2025 Financial Highlights: A Mixed Bag of Performance
PRG Holdings Berhad’s first quarter of 2025 saw a revenue of RM57.2 million, a decrease compared to the RM61.8 million recorded in the corresponding quarter of 2024. This 7.5% decline was primarily influenced by lower contributions from their construction segment as projects near completion. However, despite this revenue dip, the Group managed to achieve a higher profit before tax (PBT) of RM4.1 million, an 8.8% increase from RM3.8 million in the same period last year. This improvement in PBT was largely propelled by the strong performance of their energy efficiency segment.
Key Financial Indicators (Q1 2025 vs. Q1 2024)
Revenue
RM57,185k
Compared to Q1 2024
RM61,837k
Profit Before Tax
RM4,123k
Compared to Q1 2024
RM3,788k
Profit for the Quarter
RM2,265k
Compared to Q1 2024
RM2,672k
Basic Earnings Per Share
0.17 sen
Compared to Q1 2024
0.20 sen
Segmental Performance: The Drivers of Growth and Decline
A closer look at PRG’s various business units reveals the nuanced dynamics shaping their overall results:
Property Development & Construction
This segment saw a significant drop in revenue, recording RM5.5 million in Q1 2025 compared to RM19.4 million in the corresponding period of 2024. Consequently, it reported a loss before tax of RM0.1 million, a decline from the RM0.6 million profit in the same period last year. This reduction was primarily due to projects nearing completion, leading to reduced construction deliverables.
Manufacturing
The manufacturing segment reported a slight increase in revenue to RM21.5 million in Q1 2025 from RM20.8 million in Q1 2024, driven by higher sales of covered elastic yarn products. However, profit before tax for this segment decreased to RM2.2 million from RM3.4 million in the corresponding period of 2024. This was attributed to a decline in rubber tape product sales and a provision for slow-moving inventory.
Energy Efficiency
This segment was the standout performer, with revenue soaring to RM30.1 million in Q1 2025, an RM8.5 million increase from RM21.6 million in the corresponding period of 2024. Profit before tax for energy efficiency also surged to RM4.9 million, a remarkable RM3.2 million increase from RM1.7 million. This impressive growth was mainly driven by higher project and services income, particularly from ongoing initiatives like the Johor Data Centre.
Agriculture
The agriculture segment recorded a modest increase in revenue to RM0.1 million in Q1 2025, primarily from pineapple sales. However, it continued to report a loss before tax of RM1.3 million, a slight increase from the RM1.1 million loss in the same period of 2024. Teak wood logging remained slow due to market demand, pricing, and administrative delays.
Others
This segment reported a higher loss before tax of RM1.5 million in Q1 2025, compared to a loss of RM0.8 million in Q1 2024. The previous year’s corresponding quarter benefited from a RM1.0 million recovery from an investment in an associate, which was not present in the current quarter.
Financial Health and Cash Flow
Looking at the balance sheet, PRG Holdings Berhad’s total assets stood at RM342.6 million as of 31 March 2025, a slight decrease from RM347.1 million at the end of 2024. However, total equity saw a marginal increase to RM174.4 million, leading to an improved net assets per share of RM0.2127 from RM0.1979.
From a cash flow perspective, the Group experienced a net cash outflow from operating activities of RM12.1 million in Q1 2025, a significant increase in cash used compared to RM0.6 million in the same period last year. This was mainly due to changes in working capital, particularly a substantial increase in contract assets and decreases in trade and other payables.
Net cash used in investing activities decreased to RM1.7 million, while financing activities generated RM3.1 million in cash, a positive shift from the RM8.5 million cash used in the corresponding period of 2024. This was primarily driven by loans from shareholders.
Risks and Prospects: Navigating a Complex Landscape
PRG Holdings Berhad acknowledges the challenging global economic landscape, marked by persistent inflationary pressures, interest rate fluctuations, and geopolitical conflicts. The manufacturing sector faces headwinds from supply chain disruptions, escalating costs, currency volatility, and subdued demand. In response, the Group is recalibrating market strategies, revisiting pricing frameworks, and streamlining cost structures to maintain competitiveness.
The property market in Malaysia also remains challenging, with issues like skilled manpower shortages and rising construction material and labor costs. PRG continues to monitor these factors and implement appropriate business and cost rationalization strategies.
The agriculture segment is grappling with weather uncertainties, rising operating costs, and labor shortages. Despite these challenges, the Group remains optimistic about its agriculture segment, particularly with the anticipation of new and stable income streams from their Black Thorn Durians and other complementary commercial crops.
On a brighter note, the energy efficiency sector is experiencing a surge in global energy consumption and increasing concerns about climate change. This trend, coupled with government support for environmental initiatives and a growing focus on Environmental, Social, and Governance (ESG) considerations, presents promising growth prospects for PRG’s energy efficiency business.
Summary and
PRG Holdings Berhad’s Q1 2025 report paints a picture of a diversified group navigating a complex economic environment. While traditional segments like property and manufacturing faced headwinds, the burgeoning energy efficiency sector emerged as a key driver of profitability. The Group’s ability to improve its profit before tax despite a revenue decline underscores its strategic focus on higher-margin activities and cost management.
The company is actively addressing challenges in its various segments through strategic adjustments and cost rationalization. The long-term prospects for the energy efficiency sector appear robust, aligning well with global trends towards sustainability and increased energy demand.
- The property and construction segment faces ongoing challenges from project maturity and market conditions.
- The manufacturing segment, while seeing revenue growth, is impacted by specific product sales declines and inventory provisions.
- The agriculture segment continues to face operational challenges, though new crop streams offer future potential.
- The energy efficiency segment is a significant growth engine, benefiting from favorable market trends and project contributions.
From a senior blogger’s perspective, PRG Holdings Berhad’s Q1 2025 results highlight the importance of diversification in a volatile market. The strong performance of their energy efficiency segment is a testament to identifying and capitalizing on emerging opportunities. While challenges persist in other areas, the management’s proactive stance in recalibrating strategies and focusing on cost efficiency is crucial.
Do you think PRG Holdings Berhad’s focus on the energy efficiency segment will be enough to offset the headwinds faced by its other businesses in the coming quarters? Share your thoughts in the comment section below!
