Greetings, fellow investors and market enthusiasts! Today, we’re diving into the latest financial performance of **MASTER TEC GROUP BERHAD (MTG)**, a prominent player in Malaysia’s wire and cable industry. The company has just released its interim financial report for the first quarter ended 31 March 2025, and it presents a mixed but intriguing picture of growth amidst evolving market dynamics. While overall revenue saw an uptick, profitability experienced a slight dip, largely influenced by a strategic shift in product mix and the integration of a newly acquired subsidiary. Let’s unpack the numbers and see what’s driving MTG’s journey.
Q1 2025 Financial Performance: A Closer Look
MTG’s first quarter results show a resilient top-line performance, bolstered by new ventures. However, the bottom line reflects the impact of changes in product demand.
Overall Financial Highlights
For the quarter ended 31 March 2025, MTG reported a commendable increase in revenue, while its profit figures saw a marginal decline compared to the same period last year. This indicates a strategic adaptation in their business operations.
Q1 2025 (RM’000)
Revenue: 70,242
Gross Profit (GP): 8,319
Profit Before Tax (PBT): 5,099
Profit After Tax (PAT): 4,538
Basic Earnings Per Share (sen): 0.44
Q1 2024 (RM’000)
Revenue: 67,145
Gross Profit (GP): 9,768
Profit Before Tax (PBT): 5,107
Profit After Tax (PAT): 4,988
Basic Earnings Per Share (sen): 0.49
Revenue grew by 4.61% to RM70.24 million from RM67.15 million in the corresponding quarter of the previous year. This growth, however, came with a slight contraction in profitability. Gross Profit (GP) decreased to RM8.32 million from RM9.77 million, leading to a lower GP margin of 11.84% compared to 14.55% previously. This shift was primarily attributed to changes in the product mix. Profit Before Tax (PBT) remained relatively stable at RM5.10 million, while Profit After Tax (PAT) was marginally lower at RM4.54 million.
Segmental Performance: A Tale of Two Contributions
MTG’s revenue streams are categorized into manufacturing, trading, and a new contract revenue segment. The latest quarter highlights the evolving contributions from each sector.
Q1 2025 (RM’000)
Manufacturing & Trading: 65,377
Contract Revenue (Sediacom): 4,865
Q1 2024 (RM’000)
Manufacturing & Trading: 67,145
Contract Revenue (Sediacom): –
The traditional manufacturing and trading segments collectively contributed RM65.38 million, a 2.63% decline from the previous year. This was largely due to a significant drop in sales of aluminium-cored Low Voltage (LV) power cables (from RM34.74 million to RM16.32 million). However, this shortfall was partially offset by robust sales of copper-cored LV power cables, which surged to RM43.73 million from RM29.56 million, and higher sales of control and instrumentation cables. The trading segment also saw increased revenue.
The most notable development is the emergence of the **Contract Revenue segment**, which contributed a significant RM4.87 million, or 6.93% of total revenue. This new stream is a direct result of the acquisition of **Sediacom Sdn. Bhd.** in the fourth quarter of 2024. Sediacom specializes in infrastructure and utility services, including drilling and underground cable laying, adding a promising new dimension to MTG’s business.
Comparison with Immediate Preceding Quarter (Q4 2024)
Looking at the quarter-on-quarter performance, the current quarter saw a decrease in key financial metrics, which the company attributes to typical seasonal factors.
| Metric | Q1 2025 (RM’000) | Q4 2024 (RM’000) | Change (%) |
|---|---|---|---|
| Revenue | 70,242 | 96,423 | -27.15% |
| PBT | 5,099 | 6,825 | -25.30% |
| PAT | 4,538 | 7,446 | -39.06% |
Revenue declined by 27.15% compared to the immediate preceding quarter (Q4 2024), which is largely attributed to seasonal factors such as fewer working days during festive periods and the timing of customer deliveries. This naturally led to lower PBT and PAT figures for the quarter.
Financial Health: Balance Sheet & Cash Flow
As of 31 March 2025, MTG’s financial position remains robust.
Total assets stood at RM311.63 million, a slight increase from RM310.69 million at the end of December 2024. Total equity also saw an increase to RM189.18 million from RM184.64 million. This translated to an improved net asset per ordinary share of 18.43 sen, up from 18.00 sen.
Cash flow from operating activities was RM1.31 million for the quarter. Total borrowings increased to RM72.27 million from RM65.38 million in the corresponding period last year, reflecting ongoing operational and expansion activities.
It’s worth noting that the Board of Directors did not recommend any dividend for the current financial quarter under review.
Outlook and Strategic Initiatives: Powering Future Growth
MTG’s management remains optimistic about the future, underpinned by positive industry trends and strategic expansion plans.
Market Prospects
The Malaysian wire and cable market is projected for steady growth, with ex-factory sales expected to increase from RM9.61 billion in 2022 to RM11.21 billion in 2025, indicating a Compound Annual Growth Rate (CAGR) of 5.25%. This demand is closely tied to industrialization and significant infrastructure spending under the Twelfth Malaysia Plan (2021-2025), which prioritizes investments in generation capacity and reinforcement of electricity transmission and distribution networks.
Strategic Growth Pillars
MTG is actively pursuing several key strategies to capitalize on these opportunities:
- **Venture into Medium-Voltage (MV) Power Cables:** This expansion into higher-voltage cables will broaden their product offering and tap into new market segments.
- **Expand Market Coverage through Export Sales:** Increasing their international footprint will diversify revenue streams and reduce reliance on the domestic market.
- **Leveraging the Sediacom Acquisition:** The acquisition of Sediacom, completed in October 2024, provides MTG with immediate access to the power infrastructure utilities market. Sediacom’s expertise in drilling, underground cable laying, overhead line installation, and road safety management creates new synergies and enhances MTG’s competitive position as a comprehensive solutions provider.
The company also has capital commitments totaling RM12.25 million for the purchase of new machinery and equipment, and freehold land, signalling further investment in capacity expansion.
Summary and Outlook
MASTER TEC GROUP BERHAD’s Q1 2025 report showcases a company actively navigating market shifts and strategically expanding its business horizons. While a temporary dip in profitability due to product mix changes and seasonal factors is evident, the overall revenue growth, significantly aided by the new contract revenue segment from Sediacom, paints a picture of a dynamic entity.
The company’s strategic focus on diversifying its product portfolio (e.g., into MV cables) and expanding its market reach, coupled with the integration of Sediacom’s specialized services, positions it well to capitalize on the robust growth projected for Malaysia’s wire and cable and power infrastructure sectors. The emphasis on operational efficiency and leveraging new capabilities should help MTG maintain its trajectory.
Key points from this report include:
- Overall revenue growth driven by the newly acquired contract revenue segment.
- A shift in product mix impacting gross profit margins, with strong copper-cored cable sales offsetting declines in aluminium-cored cables.
- Strategic expansion into medium-voltage cables and export markets.
- The Sediacom acquisition opening up new opportunities in power infrastructure utilities.
What are your thoughts on MTG’s strategic direction and its ability to maintain growth in the coming quarters? Do you believe the new contract revenue segment will significantly bolster its profitability moving forward? Share your insights in the comments below!
