Greetings, fellow investors! Today, we’re taking a closer look at A-Rank Berhad’s latest financial report for the third quarter ended 30 April 2025. This report offers a crucial glimpse into how the company is performing amidst a dynamic economic landscape, particularly for Malaysian retail investors keen on understanding the underlying health of their investments.

While the report indicates a dip in revenue for both the quarter and the cumulative nine-month period, A-Rank has demonstrated resilience in its profit before tax for the cumulative period. The company also recently returned value to shareholders through a dividend payment for the previous financial year. Let’s unwrap the details and see what’s truly shaping A-Rank’s journey.

Core Financial Highlights: A Mixed Bag of Results

A-Rank’s Q3 FY2025 performance presents a mixed picture. While revenue saw a decline, the cumulative profit before tax showed slight stability, indicating underlying operational management. Here’s a breakdown:

Quarterly Performance (Q3 FY2025 vs Q3 FY2024)

For the current quarter, A-Rank reported a revenue of RM131.6 million, a notable decrease of 23.1% compared to RM171.3 million in the corresponding quarter last year. This dip was primarily attributed to lower business volume. Consequently, profit before tax (PBT) also saw a slight decline of 5.1% to RM2.9 million from RM3.1 million. The profit after tax (PAT) experienced a more significant drop of 60.9% to RM1.3 million, largely due to higher tax provisions in the current period.

Cumulative Performance (9 Months Ended 30 April 2025 vs 9 Months Ended 30 April 2024)

Looking at the cumulative nine-month period, revenue decreased by 18.3% to RM426.9 million. However, the Group’s profit before tax (PBT) remained relatively stable, showing a marginal increase of 0.2% to RM9.83 million. This resilience in PBT, despite lower revenue, suggests improved margins in certain segments. Profit after tax (PAT) for the cumulative period, however, declined by 20.3% to RM6.3 million, again impacted by higher tax provisions.

Segmental Performance: Aluminium vs. Property Development

A-Rank operates primarily in two segments: Aluminium and Property Development.

• Aluminium Segment: This segment reported a lower profit before tax for the cumulative period, down 4.9% compared to the corresponding period last year. This aligns with the overall decrease in revenue, although the report notes “better margins” which helped mitigate the impact of lower sales volume.
• Property Development Segment: This segment showed an encouraging trend. It incurred a lower loss before tax of RM0.8 million for the current quarter, an improvement from the RM1.0 million loss in the preceding quarter. For the cumulative period, the loss before tax decreased to RM2.7 million from RM3.3 million in the corresponding period last year. This improvement is attributed to rental income from leasing vacant land for a sports centre and lower interest expenses.

Financial Health: Balance Sheet & Cash Flow

As at 30 April 2025, A-Rank’s financial position shows some key changes:

The increase in total assets and equity, along with a higher net asset per share, indicates a strengthening balance sheet. However, a closer look at the cash flow statement reveals a significant shift. Net cash flow from operating activities moved from a positive RM42.8 million in the corresponding nine-month period last year to a negative RM36.1 million for the current period. This was largely influenced by changes in working capital, specifically increases in inventories and receivables, and decreases in payables.

The Group’s total borrowings increased to RM115.1 million as at 30 April 2025, compared to RM88.9 million as at 31 July 2024. This increase is primarily in short-term borrowings, while long-term borrowings have decreased.

Risks and Prospects: Navigating a Challenging Global Environment

A-Rank acknowledges the challenging global economic outlook. The Board maintains a cautiously optimistic view for the upcoming quarter, recognizing both external headwinds and domestic opportunities.

Global Headwinds: The report highlights several macro-economic factors that could impact performance:

• Escalating trade tensions and higher tariffs, particularly affecting key industries like aluminium.
• Persistent inflationary pressures.
• Global policy uncertainties.
• Disrupted supply chains and heightened volatility in commodity and financial markets, leading to a subdued global trade environment.

Domestic Resilience: In contrast, the Malaysian economy showed expansion in the first quarter, driven by resilient domestic demand and sustained export performance, especially in the electrical and electronic (E&E) sector and tourism-related industries. Bank Negara Malaysia continues to emphasize strong household spending and services-related activity as core economic drivers.

Company Strategies: To address these challenges and seize opportunities, A-Rank remains focused on:

• Operational resilience.
• Cost management strategies.
• Enhancing efficiency.
• Improving productivity.

The Board expresses confidence that the Group will remain profitable in the upcoming quarter, barring unforeseen circumstances.