Core instructions: You are a senior blogger, and your task is to directly output the content based on the uploaded company quarterly report
Convert this report into a format suitable for English blog HTML writing.
Olympia Industries Berhad: A Closer Look at Q1 2025 Results – Signs of Recovery Amidst Lingering Challenges
Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial performance of Olympia Industries Berhad (OIB) for the first quarter ended 31 March 2025. This report offers a mixed bag of progress and persistent hurdles, painting a picture of a company navigating a complex landscape. While OIB has managed to significantly narrow its losses compared to the same period last year, a deeper dive reveals that the path to sustained profitability remains challenging, particularly in certain segments.
Let’s break down the numbers and understand what’s truly driving OIB’s performance.
Core Financial Highlights: A Quarter of Improved Losses
OIB’s first quarter of 2025 shows a notable improvement in its bottom line compared to the previous corresponding quarter. The Group successfully increased its revenue while significantly reducing its operating and pre-tax losses. This is certainly a positive headline, but it’s essential to understand the underlying drivers.
Q1 2025 Performance
Revenue: RM23.9 million
Operating Loss: RM1.0 million
Loss Before Tax: RM3.4 million
Loss Attributable to Owners: RM3.4 million
Basic Loss Per Share: 0.3 sen
Compared to Q1 2024
Revenue: RM22.5 million (Up by 5.9%)
Operating Loss: RM2.7 million (Improved by 62.4%)
Loss Before Tax: RM4.8 million (Improved by 28.0%)
Loss Attributable to Owners: RM4.8 million (Improved by 28.6%)
Basic Loss Per Share: 0.5 sen (Improved)
The consolidated revenue saw a modest increase of 5.9%, or RM1.3 million, primarily propelled by the Gaming division, which accounted for a significant 93.1% of the total revenue. The reduction in losses is largely attributed to a lower payout ratio in the Gaming division during the current quarter, which offset a higher loss incurred by the Leasing division due to reduced occupancy rates at Menara Olympia.
Current Quarter vs. Immediate Preceding Quarter: A Different Story
While the year-on-year comparison looks positive, looking at the performance against the immediate preceding quarter (Q4 2024) reveals a different trend. The Group actually reported a higher loss before tax in Q1 2025 compared to Q4 2024.
Q1 2025 Performance
Revenue: RM23.9 million
Operating Loss: RM1.0 million
Loss Before Tax: RM3.4 million
Loss Attributable to Owners: RM3.4 million
Compared to Q4 2024
Revenue: RM20.0 million (Up by 19%)
Operating Profit: RM1.2 million (Worsened to a loss of 185%)
Loss Before Tax: RM1.2 million (Worsened by 184%)
Loss Attributable to Owners: RM1.5 million (Worsened by 122%)
This increased loss, despite higher revenue, was primarily due to a higher payout ratio in the Gaming division, even though average sales per draw improved. On a brighter note, the Property Development segment saw lower losses in the current quarter due to reduced project costs.
Diving Deeper: Segmental Performance
OIB’s business is primarily driven by its Gaming division, with contributions also from Property Development and Leasing.
| Segment | Q1 2025 Revenue (RM’000) | Q1 2024 Revenue (RM’000) | Q1 2025 Segment Result (RM’000) | Q1 2024 Segment Result (RM’000) | Key Commentary |
|---|---|---|---|---|---|
| Gaming | 22,178 | 19,508 | 1,393 (Profit) | (434) (Loss) | Main revenue driver, improved from loss to profit due to lower payout ratio (61.9% vs 67.0%). Expected to continue post-pandemic recovery. |
| Leasing | 1,679 | 3,011 | (636) (Loss) | 328 (Profit) | Significant revenue decline and shift to loss due to lower occupancy rates at Menara Olympia. Expected to report lower performance for the rest of FY2025. |
| Property Development | – | – | (791) (Loss) | (1,915) (Loss) | No revenue, but losses narrowed due to lower project costs. New products unlikely to be unveiled soon given market sentiment. |
| Investment Holding & Others | – | – | (983) (Loss) | (682) (Loss) | Contributes to overall loss. |
The Gaming division remains the backbone, with its improved profitability being the primary reason for the overall narrowed losses compared to the previous corresponding quarter. However, the Leasing division is a drag, and its challenges are expected to persist.
Financial Health and Liquidity
As of 31 March 2025, OIB’s total assets stood at RM561.5 million, a slight increase from RM559.3 million at the end of 2024. Total equity saw a minor dip to RM319.6 million from RM323.1 million. A crucial point to note is that the Group’s current liabilities exceeded its current assets by RM42.4 million, indicating a working capital deficit. Borrowings increased slightly to RM149.1 million from RM146.0 million at the end of the previous financial year.
From a cash flow perspective, OIB continued to see net cash outflows from all three major activities: operating, investing, and financing. This resulted in a net decrease in cash and cash equivalents of RM8.6 million for the quarter.
Risks and Future Prospects: Navigating a Challenging Path
The report highlights several material uncertainties that cast significant doubt on the Group’s ability to continue as a going concern. These include consistent historical losses, the current liabilities exceeding current assets, and declining occupancy rates at Menara Olympia.
OIB has a secured term loan of RM110 million, with partial repayments due in August 2025 (RM5 million) and August 2026 (RM105 million). The Group has received a temporary indulgence from complying with the Interest Service Coverage Ratio until 1 January 2026. Future compliance hinges on an improvement in market conditions for office leasing and management’s efforts to boost tenancy rates.
Management plans to dispose of unencumbered assets, such as land held for property development and inventories, to reduce borrowings. However, the uncertain outlook for the property market may hinder the quick liquidation of these assets at their full value.
Despite these challenges, the Group expresses optimism about the resilience of the Malaysian economy. The Gaming division is expected to maintain its post-pandemic recovery trajectory. However, the Leasing division is anticipated to continue facing headwinds, while the Property Development segment is unlikely to launch new projects in the immediate term due to market sentiments.
Summary and
Olympia Industries Berhad’s Q1 2025 report presents a mixed picture. While the Group managed to reduce its overall losses significantly compared to the previous corresponding quarter, primarily driven by the Gaming division’s improved payout ratio, the comparison with the immediate preceding quarter reveals a worsening of losses. This highlights the volatility in the Gaming segment’s profitability and the persistent challenges faced by the Leasing division.
The “going concern” note and the reliance on asset disposals for debt reduction underscore the financial pressures OIB is under. The Group’s ability to sustain its operations and return to consistent profitability will depend heavily on the continued recovery and stability of its Gaming operations, a turnaround in the office leasing market, and successful execution of its asset disposal plans. Investors should carefully consider these factors when evaluating the company’s future.
Key risk points highlighted in the report include:
- The Group has been consistently making losses over the years, and current liabilities exceed current assets.
- Declining occupancy rates at Menara Olympia are impacting the Leasing division’s performance.
- Future compliance with term loan covenants depends on market improvement and management efforts, with temporary indulgence granted only until January 2026.
- Uncertainty in the property market may hinder the timely liquidation of assets intended to reduce borrowings.
- The volatility in the Gaming division’s payout ratio can significantly impact overall profitability.
What are your thoughts on OIB’s Q1 2025 performance? Do you believe the Gaming division’s recovery can sufficiently offset the challenges in other segments, or will the property market headwinds continue to weigh heavily on the Group? Share your insights in the comments below!
