Poh Huat Resources Holdings Berhad Navigates Trade Headwinds in Q2 FY2025
Poh Huat Resources Holdings Berhad, a prominent player in the furniture manufacturing industry, recently released its unaudited financial results for the second quarter ended 30 April 2025. This report offers Malaysian retail investors a crucial look into the company’s performance, revealing a challenging quarter marked by external economic pressures, yet also highlighting the company’s strategic responses and continued commitment to shareholders.
While the company experienced a notable decline in its quarterly profit, largely attributed to evolving global trade policies and increased operational costs, it maintained its dividend payouts, reflecting a resilient stance. Let’s dive deeper into the numbers and what they mean for Poh Huat’s journey ahead.
Core Data Highlights: A Closer Look at Performance
Overall Financial Performance
The second quarter of the financial year 2025 (Q2 FY2025) presented a mixed bag for Poh Huat. Revenue saw a decrease compared to the previous year’s corresponding period, primarily due to lower orders and shipments, particularly from Malaysian operations and a slowdown in Vietnam due to US import tariffs.
Individual Quarter (Q2 FY2025)
Revenue: RM98,331,074
Gross Profit: RM13,021,918
Profit Before Tax: RM249,343
Profit After Tax: RM575,015
Basic Earnings Per Share: 0.22 sen
Previous Year’s Corresponding Quarter (Q2 FY2024)
Revenue: RM108,346,076
Gross Profit: RM15,479,212
Profit Before Tax: RM8,434,155
Profit After Tax: RM7,230,404
Basic Earnings Per Share: 2.73 sen
For the individual quarter, revenue declined by 9.2%. Gross profit also dropped, largely due to higher material and labour costs coupled with lower capacity utilisation in both Malaysian and Vietnamese factories. A significant factor impacting profit was the ‘Other Income’ line, which saw a substantial decrease from RM5.78 million to RM0.70 million. This was mainly driven by a foreign exchange loss of RM1.85 million in the current period, compared to a gain of RM2.28 million in the prior year’s corresponding period, alongside lower investment income.
Consequently, Profit Before Tax (PBT) for the quarter plummeted by 97.0% to RM0.25 million. Profit After Tax (PAT) followed a similar trend, decreasing by 92.0% to RM0.58 million, leading to a significantly lower Basic Earnings Per Share (EPS) of 0.22 sen.
Cumulative Quarters (YTD Q2 FY2025)
Revenue: RM234,584,586
Gross Profit: RM35,390,009
Profit Before Tax: RM12,792,194
Profit After Tax: RM10,056,422
Basic Earnings Per Share: 3.80 sen
Previous Year’s Cumulative Quarters (YTD Q2 FY2024)
Revenue: RM239,485,645
Gross Profit: RM41,453,911
Profit Before Tax: RM22,132,853
Profit After Tax: RM17,533,370
Basic Earnings Per Share: 6.62 sen
For the cumulative six months, revenue saw a marginal decrease of 2.0%. PBT and PAT for the cumulative period also experienced significant drops of 42.2% and 42.6% respectively, with EPS at 3.80 sen, down from 6.62 sen in the previous year’s corresponding period.
Segmental Performance
The report provides a geographical breakdown of performance, highlighting the challenges faced in key markets:
Revenue by Geographical Segment (Cumulative Quarters)
| Segment | Q2 FY2025 (RM’000) | Q2 FY2024 (RM’000) | Change (%) |
|---|---|---|---|
| Malaysia | 143,231 | 141,536 | +1.2% |
| Vietnam | 91,354 | 97,950 | -6.7% |
| Total | 234,585 | 239,486 | -2.0% |
While Malaysia saw a slight increase in cumulative revenue, Vietnam experienced a decline, reflecting the impact of customers holding back orders due to potential US import tariffs.
Profit Before Tax by Geographical Segment (Individual Quarter)
| Segment | Q2 FY2025 (RM’000) | Q2 FY2024 (RM’000) | Change (%) |
|---|---|---|---|
| Malaysia | (826) | 7,212 | -111.5% |
| Vietnam | 1,255 | 1,182 | +6.2% |
| Australia | 514 | 336 | +53.0% |
| Others | (694) | (296) | -134.5% |
| Total | 249 | 8,434 | -97.0% |
Malaysia’s operations recorded a loss before tax in the current quarter, a significant reversal from a profit in the prior year, primarily due to lower office furniture orders. Vietnam, despite lower shipments, managed a slight increase in PBT for the quarter.
Financial Position and Cash Flow
As of 30 April 2025, Poh Huat’s total assets stood at RM571.51 million, a decrease from RM601.15 million at 31 October 2024. This was largely due to a reduction in cash and bank balances and inventories, while short-term investments increased. Total equity also saw a slight decrease to RM504.72 million.
Cash flow from operating activities for the cumulative period was positive at RM0.26 million, though significantly lower than the RM3.61 million in the previous year’s corresponding period. This reflects the challenging operating environment. The company saw a substantial net cash outflow from investing activities of RM63.08 million, primarily due to increased fixed deposits with tenure more than 3 months and other short-term investments, indicating strategic asset allocation rather than operational deficit. The company continues to maintain a healthy balance sheet with no group bank borrowings.
Risk and Prospect Analysis
The report acknowledges that the global economy, and by extension the furniture industry, remains in a “state of flux.” The primary concern highlighted is the uncertainty surrounding changing trade policies under the Trump administration and potential retaliatory actions by other governments. This environment makes it difficult for businesses to make accurate predictions or long-term mitigation plans.
Specifically, the imposition of import tariffs by the US is causing some customers to hold back orders, while others are rushing to ship within the 90-day tariff grace period. This creates an unpredictable demand pattern.
In response, Poh Huat is adopting a proactive stance:
- Staying Informed: Continuously monitoring U.S. trade policies.
- Expediting Orders: Working to ship confirmed orders as quickly as possible.
- Open Communication: Maintaining close dialogue with customers to understand their needs and adapt.
- Operational Adjustments: Flexibly adjusting production schedules, inventory levels, workforce, and supply chain to accommodate drastic changes.
It’s also worth noting the inherent seasonality of the furniture business, with production and sales typically lower at the beginning of the calendar year due to festive periods and mid-year summer holidays. This natural cycle, combined with the current trade uncertainties, adds layers of complexity to the company’s outlook.
Dividends: A Return to Shareholders
Despite the challenging quarter, Poh Huat has continued its commitment to shareholder returns. The company declared two interim dividends, totaling 4 sen per ordinary share for the current financial period ended 30 April 2025:
- First Interim Dividend: 2 sen per ordinary share (for Q1 FY2025), paid on 31 December 2024.
- Second Interim Dividend: 2 sen per ordinary share (for Q2 FY2025), paid on 24 July 2025.
This consistent dividend payout demonstrates the company’s financial discipline and confidence in its long-term stability, even amidst short-term headwinds.
Summary and Outlook
Poh Huat Resources Holdings Berhad’s Q2 FY2025 report reflects a period of significant external challenges, particularly from fluctuating global trade policies and rising operational costs. The sharp decline in quarterly profit before tax underscores the immediate impact of these factors, especially the foreign exchange losses and lower capacity utilization.
However, the report also showcases the company’s strategic agility and resilience. Despite the headwinds, Poh Huat is proactively managing its operations, maintaining open communication with customers, and adjusting its supply chain to navigate the uncertain landscape. The continued declaration of dividends further signals the board’s confidence in the company’s underlying strength and commitment to its shareholders.
Key points from the report include:
- Significant quarterly profit decline driven by lower orders, higher costs, and adverse foreign exchange movements.
- Impact of US trade policies and tariffs on both Malaysian and Vietnamese operations.
- Proactive management strategies to adapt to market uncertainties.
- A strong financial position with no bank borrowings and healthy cash reserves, despite a decrease in overall cash balances due to strategic investments.
- Consistent dividend payouts, reinforcing shareholder confidence.
Ending Thoughts
From a professional standpoint, Poh Huat’s latest report clearly illustrates the complexities of operating in a globalized economy, especially for export-oriented businesses. The company’s immediate profitability has taken a hit, which is a concern. However, its strong balance sheet, absence of bank borrowings, and the strategic move to increase short-term investments suggest a prudent financial management approach, positioning it to weather the storm.
The focus on adapting production and supply chain to market changes is critical, and the continued dividend distribution is a positive signal for retail investors seeking stable returns. The future trajectory of Poh Huat will heavily depend on the resolution of global trade tensions and the effectiveness of its adaptive strategies.
What are your thoughts on Poh Huat’s performance this quarter? Do you believe their proactive measures are sufficient to overcome the current trade uncertainties? Share your insights in the comments below!
