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NetX Holdings Q2 2025: Revenue Climbs, But Forex Woes Deepen Losses
NetX Holdings Berhad just released its financial results for the second quarter ended May 31, 2025, and it’s a mixed bag of strategic progress and financial headwinds. While the company saw a commendable jump in revenue, its bottom line was hit hard by external market forces, particularly in foreign exchange.
For investors tracking NetX’s journey as it pivots and repositions its business, this report offers crucial insights. Let’s dive deep into the numbers to understand what’s driving the performance and what lies ahead for the company.
The headline story for Q2 2025 is a tale of two opposing forces: operational revenue grew by over 20%, but a significant unrealised foreign exchange loss pushed the company into a deeper net loss compared to the same period last year.
Core Financials: A Closer Look at the Numbers
At a glance, the top-line growth looks promising. However, the profitability metrics tell a different story, highlighting challenges that the company is currently navigating.
Revenue Growth Driven by Strategic Focus
Q2 2025 Revenue
RM2.89 million
Q2 2024 Revenue
RM2.39 million
NetX posted a 21% year-on-year increase in revenue, primarily fueled by a strong performance in its Non-electronic Payment Services segment. This segment saw a revenue surge of RM1.10 million thanks to the completion of a major project. This growth successfully offset the planned revenue decline from the GEM and Fast Food segments as the group strategically exits the F&B and florist markets.
Profitability Under Pressure
Q2 2025 Loss Before Tax
(RM9.31 million)
Q2 2024 Loss Before Tax
(RM4.28 million)
Despite higher revenue, the Group’s loss before tax more than doubled. The primary cause was a staggering RM7.04 million unrealised loss on foreign exchange and a RM1.37 million fair value adjustment on quoted investments. It’s important for investors to note that these are non-cash items, meaning they impact the accounting profit but don’t represent an actual cash outflow for the quarter. This was partially cushioned by lower operating expenses.
Q2 2025 Loss Per Share
(0.92 sen)
Q2 2024 Loss Per Share
(0.44 sen)
Consequently, the loss per share attributable to company owners widened, reflecting the larger net loss for the period.
Segment Performance: Where’s the Growth Coming From?
A breakdown by business segment reveals a clearer picture of NetX’s ongoing strategic transition.
| Business Segment | Q2 2025 Revenue (RM’000) | Q2 2024 Revenue (RM’000) | Q2 2025 Segment Result (RM’000) | Q2 2024 Segment Result (RM’000) | Key Highlights |
|---|---|---|---|---|---|
| Non-electronic Payment Services | 1,517 | 416 | 33 | (5) | The star performer this quarter, turning a profit on the back of a significant project completion. |
| Money Lending Services | 854 | 730 | 428 | 572 | Steady revenue growth from higher loan disbursements, though profit was slightly impacted by interest expenses. |
| Electronic Payment & Money Services | 133 | 80 | (192) | (1,672) | Losses narrowed significantly due to reduced amortisation costs, a positive sign for operational efficiency. |
| GEM | 51 | 755 | (235) | (1,370) | Revenue is minimal as the GemSpot app is under redevelopment. Losses have been substantially reduced. |
| Fast Food Chain | – | 308 | – | (233) | No longer contributes to revenue as the Group’s stake was diluted, and it ceased to be a subsidiary. |
Risks and Future Prospects
Looking ahead, NetX’s management has adopted a “prudent and steady approach.” The focus remains on disciplined execution and navigating a challenging business environment.
Company’s Outlook
- Money Lending: This segment is expected to continue its steady performance, with a focus on responsible lending and maintaining portfolio quality.
- Non-electronic Payment Services: The group will continue pursuing project-based opportunities to build on this quarter’s success.
- Electronic Payment & GEM: The eFX platform and GemSpot application remain in a developmental or monitoring phase. Their future contribution will depend on market trends and the successful rollout of new initiatives.
Strategic Corporate Actions
Notably, the company is undertaking a Proposed Share Capital Reduction of up to RM200 million. This is a significant corporate exercise often used to eliminate accumulated losses, which cleans up the balance sheet and can pave the way for future corporate actions or dividend distributions, should profits allow.
Summary and Outlook
NetX’s second-quarter results paint a picture of a company in transition. The operational progress, particularly in the Non-electronic Payment segment, is a clear positive, demonstrating that its strategic pivot is beginning to yield results. The stability of the Money Lending business provides a solid foundation.
However, the significant net loss, driven by non-cash forex movements, serves as a stark reminder of the external risks the company faces. Investors should look beyond the headline loss to assess the underlying operational health while remaining mindful of market volatility. The company’s future success will largely depend on its ability to execute its strategy, grow its core segments, and successfully redevelop its digital platforms like GemSpot.
This is not an investment recommendation. Investors should conduct their own due diligence before making any investment decisions. Key risks to monitor include:
- Market Volatility: Vulnerability to foreign exchange fluctuations and investment market performance can significantly impact reported earnings.
- Execution Risk: The success of the company’s turnaround hinges on the effective redevelopment of the GemSpot app and continued growth in its core payment and lending businesses.
- Project Dependency: The Non-electronic Payment segment’s performance may be lumpy, relying on securing and completing large-scale projects.
Final Thoughts
From my perspective, while the headline loss is alarming, it’s crucial for investors to distinguish between operational performance and non-cash accounting losses. The growth in the Non-electronic Payment segment and the stability of Money Lending are positive operational signs. However, the company’s future hinges on managing market volatility and successfully executing its strategic pivot. The approved Share Capital Reduction is a key event to watch, as it could reset the company’s financial slate for a fresh start.
What are your thoughts on NetX’s strategic shift? Do you believe their focus on payment services and money lending will pay off in the long run?
Share your views in the comments section below!
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