Innity Corporation Berhad Q1 2025 Latest Quarterly Report Analysis

Navigating the Digital Advertising Landscape: Innity’s Q1 2025 Performance

Overall Financial Performance

The first quarter of 2025 presented a challenging period for Innity Corporation Berhad, with key financial indicators reflecting a downturn compared to the corresponding quarter last year. The group’s revenue experienced a notable contraction, alongside an increase in losses attributable to owners of the company. However, it’s worth noting that the overall loss after tax saw a slight improvement.

Revenue for the first quarter of 2025 stood at RM23.18 million, marking a 16% decrease from RM27.72 million recorded in the first quarter of 2024. This decline in top-line performance directly impacted profitability, leading to a higher loss before tax of RM3.54 million, an increase of 13% compared to RM3.14 million in the prior year’s corresponding quarter. The loss attributable to owners of the company also widened by 39% to RM3.79 million, translating to a basic loss per share of (2.72) sen, compared to (1.95) sen previously. Interestingly, the loss after tax actually narrowed by 4% year-on-year, indicating some positive shifts below the tax line.

Liquidity and Financial Health

Assessing Innity’s financial health requires a look at its liquidity and gearing. The report indicates a tighter cash position and an increase in the debt-to-equity ratio.

Cash and cash equivalents decreased to RM10.56 million as at 31 March 2025 from RM17.93 million a year ago. The debt-to-equity ratio also rose slightly to 0.19 from 0.14 in the first quarter of 2024, suggesting a moderate increase in leverage. The primary sources of liquidity for the Group remain cash from operations, receivable factoring, and bank overdrafts.

Performance by Business Unit: A Regional Deep Dive

Innity operates across various geographical regions, and a detailed look at each unit reveals diverse performances, reflecting varied market conditions and strategic outcomes.

Malaysia: Navigating Reduced Ad Spend

Malaysia remains the largest revenue contributor but faced significant headwinds.

Revenue in Malaysia declined by 27% year-on-year to RM9.64 million, primarily due to reduced digital advertising spend from large global agencies. This led to a four-fold deterioration in loss before tax, reaching RM1.59 million, despite improvements in gross profit margin and lower operating expenses.

Singapore: Cost Savings Mitigate Revenue Slowdown

Singapore’s performance was impacted by market uncertainty but benefited from cost controls.

Revenue in Singapore saw a slight 3% decrease to RM2.44 million. Market conditions, influenced by global trade tensions and local political developments, led to reduced marketing budgets. However, the loss before tax narrowed significantly by 51% to RM0.16 million, driven by effective cost savings in staffing, marketing, and administrative expenses.

Vietnam: Impact of Client Spending Shifts

Vietnam experienced a notable decline due to specific client-related factors.

Revenue in Vietnam dropped by 26% to RM2.29 million, largely attributable to reduced spending from certain global agencies and the non-renewal of a spending agreement with a key direct client. Consequently, loss before tax worsened by 49% to RM0.47 million, in line with the lower revenue.

Indonesia: A Beacon of Growth