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Tex Cycle’s Profits Surge 21% in Q2 FY2025: A Deep Dive into Its Sustainable Future
Tex Cycle Technology (M) Berhad, a prominent player in Malaysia’s waste management and recycling sector, has just released its financial results for the second quarter ending June 30, 2025. The report reveals a compelling story of resilient growth and strategic expansion. While the headline numbers are impressive, a closer look reveals a company actively shaping its future by venturing into high-growth areas like e-waste and renewable energy. Let’s break down the key highlights.
The most striking figure from the report is the 21% year-on-year increase in Profit Before Tax (PBT), a clear indicator of the company’s strengthening profitability.
A Closer Look at the Numbers: Q2 FY2025 Performance
Tex Cycle’s financial performance this quarter demonstrates solid top-line and bottom-line growth. The company’s revenue saw a healthy increase, driven by strong performance in its trading and renewable energy divisions, which successfully compensated for challenges in other areas.
Q2 FY2025 (Current Quarter)
Revenue: RM8.6 million
Profit Before Tax (PBT): RM3.4 million
Q2 FY2024 (Corresponding Quarter)
Revenue: RM8.3 million
Profit Before Tax (PBT): RM2.8 million
What Drove the Growth?
The impressive 21% jump in PBT wasn’t just by chance. It was primarily fuelled by fair value gains and dividend income from the Group’s investments. Operationally, the growth story is supported by:
- A RM1.3 million rise in trading revenue.
- A RM0.6 million increase in renewable energy revenue. This came from higher solar output under its Feed-in-Tariff (FiT) and Corporate Renewable Energy Power Purchase Agreement (CREPPA) projects. For context, FiT is a government policy that guarantees a fixed price for renewable energy fed into the grid, ensuring a stable income stream.
However, it’s important to note that this growth was achieved despite a 24% year-on-year decline in revenue from the recycling segment, which faced lower sales demand. This highlights the growing importance of the company’s diversified business streams.
First-Half Performance: A Story of Normalised Strength
For the first six months of 2025, Tex Cycle’s revenue grew by 8% to RM17.5 million. While the cumulative PBT of RM6.0 million appears lower than the RM10.2 million from the same period last year, there’s a crucial detail: the 2024 figure included a significant one-off gain of RM15.0 million from an investment disposal. Excluding this one-off item, the Group’s normalised PBT for this year actually reflects improved operational consistency and effective cost management.
Strategic Moves: Paving the Way for Future Growth
Beyond the quarterly numbers, the report highlights two major strategic developments that are set to define Tex Cycle’s future trajectory.
Tapping into the E-Waste Goldmine: The Meridian Acquisition
In a game-changing move, Tex Cycle completed the acquisition of Meridian World Sdn Bhd in August 2025. This strategic acquisition propels the company into the fast-growing and highly specialised e-waste management sector. With Meridian’s 30-year track record and expertise in chemical waste and niche waste streams, Tex Cycle is now better positioned to capture a larger market share and strengthen its environmental solutions offerings.
Powering Up: The New Biomass Plant
The Group’s renewable energy ambitions are taking a significant step forward. Its 2MW biomass gasification power plant has successfully passed the Initial Operation Date (IOD) test with TNB. It is now undergoing further testing before it can receive its Feed-in Tariff Commencement Date (FiTCD). Once fully operational, this plant is expected to become a new, sustainable income stream, further enhancing the company’s recurring revenue base.
Summary and Outlook
Tex Cycle’s Q2 FY2025 results paint a picture of a company successfully navigating market dynamics while making bold strategic bets on the future. The strong profit growth, driven by investment gains and diversification, showcases its resilience. The acquisition of Meridian World and the progress of the biomass plant are pivotal developments that could unlock significant long-term value. This analysis is for informational purposes only and should not be considered as investment advice. Investors should conduct their own due diligence.
Key points to monitor moving forward:
- The successful integration of Meridian World and its contribution to the Group’s revenue and profit.
- The timeline for the 2MW biomass plant to achieve its FiTCD and begin generating revenue.
- A potential recovery in the core recycling segment, which experienced weaker demand this quarter.
- The company’s continued ability to manage expenses and leverage its diversified income streams to sustain growth momentum.
Final Thoughts
Tex Cycle’s latest report illustrates a company in a dynamic phase of transformation. While its core operations provide a stable foundation, the real excitement lies in its strategic initiatives in e-waste and renewable energy. These moves align perfectly with the global push for sustainability and a circular economy, positioning Tex Cycle at the forefront of a crucial industry.
With these strategic moves into e-waste and renewable energy, do you believe Tex Cycle is well-positioned for long-term sustainable growth? What are your thoughts on the challenges in its traditional recycling segment?
Share your views in the comments section below!
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