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NICHE CAPITAL EMAS HOLDINGS BERHAD: Navigating Challenges Towards a Brighter Horizon
Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial report from NICHE CAPITAL EMAS HOLDINGS BERHAD (NICE) for its Third Quarter ended 31 March 2025. This report offers a crucial glimpse into the company’s journey, revealing both significant progress in reducing losses and ongoing operational challenges. While the path ahead isn’t without its bumps, there are clear signs of strategic adjustments taking hold. Let’s unpack the numbers and understand what they mean for NICE’s future.
Q3 FY2025 Performance: A Step Towards Recovery
NICHE CAPITAL EMAS HOLDINGS BERHAD has shown a commendable effort in narrowing its losses during the third quarter of FY2025. Despite a fluctuating revenue landscape, the company managed to significantly reduce its pre-tax loss compared to the same period last year. This indicates a positive shift in operational efficiency and cost management.
Q3 FY2025
Revenue: RM2.37 million
Loss Before Tax: RM(2.63) million
Basic Loss Per Share: (0.18) sen
Q3 FY2024
Revenue: RM1.93 million
Loss Before Tax: RM(3.21) million
Basic Loss Per Share: (0.24) sen
In percentage terms, revenue saw a healthy increase of 23.2% quarter-on-quarter, rising from RM1.93 million to RM2.37 million. More impressively, the Loss Before Tax saw an 17.9% improvement, shrinking from RM3.21 million to RM2.63 million. This reduction in loss is a testament to the company’s efforts in streamlining operations and managing expenses.
Cumulative 9 Months FY2025: Mixed Signals with Underlying Improvement
Looking at the cumulative nine-month period, the picture is a bit more nuanced. While overall revenue saw a significant decline, the company successfully reduced its total pre-tax loss, demonstrating a more robust financial position despite top-line challenges.
9 Months FY2025
Revenue: RM6.35 million
Loss Before Tax: RM(7.38) million
Basic Loss Per Share: (0.51) sen
9 Months FY2024
Revenue: RM20.36 million
Loss Before Tax: RM(9.28) million
Basic Loss Per Share: (0.76) sen
For the nine months ended 31 March 2025, revenue was RM6.35 million, a substantial decrease from RM20.36 million in the prior year. This was primarily due to the Construction and Services segment’s shift to inter-company works. However, the Group’s Loss Before Tax improved by 20.4%, from RM9.28 million to RM7.38 million. This improvement was largely driven by lower operating expenses in the Mining segment and reduced administrative costs across the Group, alongside higher other income, including significant reversals of inventory and receivables impairment.
Segmental Deep Dive: Where the Action Is
Understanding NICE’s performance requires a look at its individual business segments:
| Segment | Q3 FY2025 PBT (RM’000) | Q3 FY2024 PBT (RM’000) | Change (%) | 9M FY2025 PBT (RM’000) | 9M FY2024 PBT (RM’000) | Change (%) |
|---|---|---|---|---|---|---|
| Trading | 562 | 26 | +2061.5% | 907 | 385 | +135.6% |
| Construction & Services | (206) | 780 | -126.4% | (248) | 1,774 | -114.0% |
| Mining | (2,383) | (3,441) | -30.7% | (6,389) | (9,639) | -33.7% |
| Others | (607) | (573) | +5.9% | (1,652) | (1,799) | -8.2% |
- Trading Segment: This segment was a shining star, recording a substantial increase in profit before tax for both the quarter (RM0.56 million vs RM0.03 million) and the nine-month period (RM0.91 million vs RM0.39 million). This was driven by higher revenue from jewellery and jadeite stone sales, coupled with lower administrative expenses.
- Mining Segment: While still incurring losses, the Mining segment significantly reduced its pre-tax loss by 30.7% for the quarter and 33.7% for the nine-month period. This improvement is attributed to overall lower mining operation costs and the temporary cessation of loss-making alluvial gold mining, with the new heap leaching plant commencing operations in late November 2024.
- Construction and Services Segment: This segment saw a shift, primarily focusing on inter-company construction of the heap leaching plant, leading to no external revenue for the current quarter and nine-month period. This resulted in a loss, contrasting with last year’s profit from external renovation contracts.
Financial Health and Cash Flow
As of 31 March 2025, NICE’s total assets stood at RM92.72 million, a modest increase from RM90.05 million at 30 June 2024. Total equity also saw a healthy rise to RM83.34 million from RM78.36 million, primarily due to the proceeds from a private placement of shares, which injected approximately RM12.37 million in net proceeds. This capital infusion has strengthened the company’s balance sheet.
From a cash flow perspective, the Group utilized more cash in operating activities (RM3.27 million outflow vs RM2.12 million outflow last year) but significantly reduced its cash outflow from investing activities (RM11.44 million vs RM29.33 million last year), reflecting a more measured approach to capital expenditure after substantial investments in the prior period. Financing activities generated a robust RM12.33 million, largely from the share issuance, helping to offset the operational cash burn.
Risks and Prospects: The Road Ahead
NICE’s management has outlined both challenges and strategic directions for the coming quarters:
- Mining Segment: The heap leaching plant, while operational, faced technical challenges with ore permeability during commissioning, leading to lower-than-expected production. The company is actively implementing corrective measures, and gradual improvement in production is anticipated. Exploration programs for Sokor North are ongoing, with Sokor Midland and South under review.
- Trading Segment: The Group expects to increase trading activities in its precious metals portfolio and will continue to opportunistically sell its remaining precious stone inventories. This segment remains a key contributor to profitability.
- Construction and Services Segment: This segment will continue its internal support for infrastructure and mining processing plant construction, while also actively seeking new external opportunities to bolster its order book.
The primary risks lie in the successful resolution of the technical issues at the mining plant, the volatility of precious metal and stone markets, and the ability of the Construction and Services segment to secure external contracts to diversify its revenue streams.
Summary and
NICHE CAPITAL EMAS HOLDINGS BERHAD’s third-quarter report for FY2025 reflects a company in transition. While the Group continues to navigate losses, the significant reduction in pre-tax loss and the strong performance of its Trading segment are encouraging signs. The strategic shift in the Mining segment, despite initial technical hurdles, points towards a more focused approach to profitability. The recent private placement has also bolstered the company’s financial reserves, providing a buffer for ongoing operations and strategic initiatives.
However, the journey ahead requires careful monitoring, especially regarding the operational efficiency of the new heap leaching plant and the ability of the Construction and Services segment to secure external projects. The company’s efforts to control costs and enhance segment-specific profitability are vital for its long-term sustainability.
Key points to watch include:
- Resolution of technical challenges and improved production volumes in the Mining segment.
- Continued strength and expansion of trading activities in the precious metals and stones market.
- Success in securing new external contracts for the Construction and Services segment.
- Overall cost management and administrative efficiency across all operations.
It’s crucial for investors to conduct their own thorough due diligence and consider their individual investment objectives and risk tolerance before making any decisions. This report provides a snapshot, and future performance will depend on the successful execution of the outlined strategies.
What are your thoughts on NICE’s latest quarter? Do you believe the corrective measures in the Mining segment will lead to significant improvements in the coming quarters? Share your insights in the comments below!
For more detailed analysis and updates on Malaysian companies, stay tuned to our blog.
Disclaimer: This blog post is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Always consult with a qualified financial advisor.
