Navigating Choppy Waters: A Look into Poh Huat Resources’ Latest Financials
Greetings, fellow investors! Today, we’re diving into the latest quarterly report from Poh Huat Resources Holdings Berhad, a prominent player in the furniture manufacturing industry. This report, covering the period ended 30 April 2025, offers a crucial glimpse into the company’s performance amidst evolving global trade dynamics. While the numbers reflect a challenging quarter, the company’s strategic responses and consistent dividend declaration are key points to consider. Let’s unpack the details and understand what’s shaping Poh Huat’s journey.
Core Financial Highlights: A Mixed Bag
Poh Huat Resources faced headwinds in the latest quarter, with both revenue and profit experiencing a decline compared to the same period last year. This was primarily attributed to lower orders, particularly for office furniture from Malaysian operations, and reduced shipments of home furniture from Vietnam due to the imposition of import tariffs by the US.
Individual Quarter Performance (30 April 2025 vs. 30 April 2024)
Revenue
RM98.33 million
(vs. RM108.35 million)
Decrease of 9.2%
Profit Before Tax (PBT)
RM0.25 million
(vs. RM8.43 million)
Decrease of 97.0%
Profit After Tax (PAT)
RM0.58 million
(vs. RM7.23 million)
Decrease of 92.0%
Basic Earnings Per Share (EPS)
0.22 sen
(vs. 2.73 sen)
Decrease of 91.9%
The significant drop in profit was a result of lower gross profit, primarily due to higher material and labour costs, coupled with lower capacity utilisation in both Malaysian and Vietnamese factories. Furthermore, a foreign exchange loss of RM1.85 million in the current period, compared to a gain of RM2.28 million last year, heavily impacted other income.
Cumulative Quarter Performance (30 April 2025 vs. 30 April 2024)
Revenue
RM234.58 million
(vs. RM239.49 million)
Decrease of 2.0%
Profit Before Tax (PBT)
RM12.79 million
(vs. RM22.13 million)
Decrease of 42.2%
Profit After Tax (PAT)
RM10.06 million
(vs. RM17.53 million)
Decrease of 42.6%
Basic Earnings Per Share (EPS)
3.80 sen
(vs. 6.62 sen)
Decrease of 42.6%
Business Unit Performance (Cumulative Quarters)
Understanding the contribution of each geographical segment provides deeper insights:
| (RM’000) | Malaysia | Vietnam | Australia | Others | Total |
|---|---|---|---|---|---|
| Sales | 143,231 | 91,354 | 0 | 0 | 234,585 |
| Profit / (Loss) Before Tax | 10,593 | 2,320 | 795 | (916) | 12,792 |
| Profit / (Loss) After Tax | 8,042 | 2,194 | 740 | (920) | 10,056 |
| Assets | 291,594 | 244,187 | 30,936 | 4,788 | 571,505 |
| Liabilities | 36,426 | 30,007 | 351 | 2 | 66,786 |
While Malaysia remains the largest contributor to sales, its Profit Before Tax for the individual quarter saw a significant decline (a loss of RM0.83 million compared to a profit of RM7.21 million in the previous corresponding period). Vietnam’s PBT, however, showed a positive increase in the individual quarter (RM1.26 million vs RM1.18 million), though cumulative PBT for Vietnam was lower.
Financial Health: A Stable Foundation
Despite the operational challenges, Poh Huat’s balance sheet remains robust. As at 30 April 2025, total assets stood at RM571.51 million, a slight decrease from RM601.15 million as at 31 October 2024. Total equity also saw a minor reduction to RM504.72 million from RM515.45 million, while total liabilities decreased to RM66.79 million from RM85.70 million, indicating good management of obligations.
Notably, the company continues to maintain a healthy cash position. Cash and cash equivalents at the end of the financial period were RM57.69 million. The Group also reported no bank borrowings as at the end of the current reporting period, which is a strong indicator of financial prudence and stability, especially in uncertain times.
Risks and Prospects: Navigating the Trade Winds
The report candidly addresses the prevailing uncertainties in the global economy and the furniture industry, particularly concerning changing trade policies under the Trump administration and potential retaliatory actions. This “state of flux” makes it difficult for businesses to make precise predictions or mitigation plans.
The company notes that some customers, especially in the office furniture segment, are rushing orders to ship within the 90-day tariff grace period, while others are adopting a “wait and see” approach. Poh Huat’s strategy is clear: stay informed about US trade policies, expedite confirmed orders, maintain open communication with customers, and adjust production schedules, inventories, workforce, and supply chain to adapt to drastic changes.
This proactive and adaptive stance is crucial for navigating the unpredictable international trade landscape. The company’s ability to quickly respond to market shifts will be key to its resilience.
Shareholder Returns: Consistent Dividends
Despite the softer performance, Poh Huat Resources demonstrated its commitment to shareholder returns by declaring dividends:
- A first interim dividend of 2 sen per ordinary share for the quarter ended 31 January 2025, paid on 31 December 2024.
- A second interim dividend of 2 sen per ordinary share for the quarter ended 30 April 2025, to be paid on 24 July 2025.
This brings the total dividends declared for the current financial period ended 30 April 2025 to 4 sen per ordinary share, providing a consistent return to investors.
Summary and
Poh Huat Resources’ latest quarterly report reflects a challenging period marked by lower revenue and profit, primarily due to reduced orders, higher costs, and adverse foreign exchange movements. The impact of global trade uncertainties, particularly US import tariffs, is clearly felt across its operations, especially in Malaysia and Vietnam. However, the company maintains a strong balance sheet with no bank borrowings and a healthy cash position, underscoring its financial resilience.
Management’s proactive approach to monitoring trade policies, adjusting operations, and maintaining open communication with customers is commendable in these volatile times. The consistent declaration of dividends also signals confidence in long-term stability and commitment to shareholder value.
Key risk points to monitor include:
- The unpredictable nature of global trade policies and their direct impact on export orders and tariffs.
- Fluctuations in material and labour costs, which can compress profit margins.
- Foreign currency exchange rate volatility, given the company’s international operations.
- The ability to maintain production efficiency and capacity utilization amidst fluctuating demand.
While the immediate outlook presents challenges, Poh Huat’s solid financial foundation and adaptive strategies position it to weather the storm. The focus will be on how effectively the company can execute its mitigation plans and adapt to the evolving market conditions.
What Are Your Thoughts?
Poh Huat Resources is clearly operating in a complex environment, balancing external pressures with internal operational adjustments. Their consistent dividend payouts are a positive sign for shareholders, but the decline in profitability warrants close attention. Do you think the company’s current strategies are sufficient to navigate the ongoing trade uncertainties and maintain its market position in the long run? Share your insights and perspectives in the comments below!
