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Welcome, fellow investors and market watchers! Today, we’re diving into the latest financial report from OASIS HARVEST CORPORATION BERHAD (formerly DOLPHIN INTERNATIONAL BERHAD) for the quarter ended 31 March 2025. This report offers a candid look at the company’s performance, highlighting both the challenges it faced and the strategic moves it’s making. While the headline figures might initially appear concerning, a deeper dive reveals a more nuanced picture, influenced by specific one-off events and seasonal trends. Let’s unpack the details and understand what this means for the company’s journey ahead.
Core Data Highlights: A Closer Look at the Numbers
OASIS HARVEST CORPORATION BERHAD’s first quarter of 2025 presented a mixed bag of results when compared to the same period last year and the immediate preceding quarter. The company recorded a decline in revenue and a swing to a loss before tax.
Q1 2025 (31 March 2025)
Revenue: RM 2,722,000
Gross Profit: RM 1,009,000
Loss Before Tax: RM (966,000)
Net Loss for the Period: RM (966,000)
Basic Loss Per Share: (0.64) sen
Q1 2024 (31 March 2024)
Revenue: RM 3,720,000
Gross Profit: RM 1,642,000
Profit Before Tax: RM 1,556,000
Net Profit for the Period: RM 1,556,000
Basic Earnings Per Share: 1.15 sen
Comparing the current quarter (Q1 2025) to the corresponding quarter last year (Q1 2024), revenue saw a notable decrease of approximately 26.8%. This reduction was primarily attributed to lower sales from the Food and Beverage (F&B) business, specifically due to a reduction in the number of operating Uncle Don’s outlets (from 6 to 3). The company also swung from a profit before tax of RM1.56 million in Q1 2024 to a loss before tax of RM0.97 million in Q1 2025. This significant shift of approximately RM2.52 million was largely due to the absence of a RM2.1 million contingent consideration waiver that was recognized as a gain in the prior year’s corresponding quarter.
Quarter-on-Quarter Performance
Moving to a quarter-on-quarter comparison (Q1 2025 vs. Q4 2024), the decline in performance is also evident:
Revenue decreased by 37.3% from RM4.34 million in Q4 2024 to RM2.72 million in Q1 2025.
Loss before taxation of RM0.97 million in Q1 2025, a significant drop from a profit of RM2.16 million in Q4 2024, representing a 144.7% decrease.
The management explained that the quarter-on-quarter decrease in revenue was mainly due to the seasonal nature of the F&B business, where sales typically peak towards the end of the year due to festive celebrations and slow down at the beginning of the year. The swing from profit to loss was primarily due to significant one-off gains recorded in the preceding quarter (Q4 2024), including a waiver of debts amounting to RM5.35 million and a compensation of RM4.85 million related to a profit guarantee that was not achieved. These gains were not present in the current quarter, leading to the reported loss.
Segmental Performance
The segment information further clarifies the revenue and profit trends:
| Segment | Revenue (31 Mar 2025) RM’000 | Revenue (31 Mar 2024) RM’000 | Segment Result (31 Mar 2025) RM’000 | Segment Result (31 Mar 2024) RM’000 |
|---|---|---|---|---|
| Food and Beverage | 2,457 | 3,792 | 232 | 2,427 |
| Trading | 346 | 576 | (87) | (26) |
| Palm oil milling | – | – | (215) | (197) |
| Investment holding | – | – | (896) | (648) |
The F&B segment, the largest contributor, saw both revenue and profit decline significantly. The Trading segment also experienced a revenue drop and a larger loss. The Palm oil milling and Investment holding segments continued to report losses.
Financial Health and Cash Flow
From the balance sheet, total assets remained relatively stable at RM49.37 million, with a slight decrease in total equity to RM34.19 million, reflecting the quarterly loss. A notable change was the reclassification of bank borrowings, with long-term borrowings decreasing to zero and short-term borrowings increasing substantially, indicating a shift in debt maturity.
Despite the net loss, the company managed to generate positive net cash from operating activities, which stood at RM856,000 for the current quarter, a significant improvement from the negative cash flow of RM144,000 in the same period last year. This suggests that while profitability was impacted by non-cash items and one-off adjustments, the core operations are still generating cash, which is a positive sign for liquidity.
Risks and Prospect Analysis: Navigating the Future
OASIS HARVEST CORPORATION BERHAD is clearly navigating a challenging period, particularly within its F&B segment. The reduction in operating outlets and the impact of seasonality are key factors affecting its top-line performance. The absence of significant one-off gains, which boosted previous quarters, has exposed the underlying operational profitability.
However, the management remains focused and confident. Their strategy for the F&B business revolves around enhancing quality customer services, implementing proper cost control planning, and shaping better food and beverage offerings. This proactive approach is crucial for improving the segment’s resilience in a muted economic environment.
On a positive note, the material litigation that the company was involved in has seen a favorable outcome. The court confirmed that the entire action had been struck out, removing a potential legal and financial overhang for the company. This resolution allows the management to fully concentrate on business operations without the distraction of ongoing legal battles.
The shift in bank borrowings from long-term to short-term is something to monitor. While total borrowings remain comparable, a higher proportion of short-term debt could increase liquidity risk if not managed effectively. However, the positive operating cash flow in the current quarter provides some comfort in this regard.
Summary and Outlook
Summary and Investment Considerations
OASIS HARVEST CORPORATION BERHAD’s Q1 2025 results reflect a challenging quarter marked by a decline in revenue and a swing to a net loss. This was primarily driven by a reduction in its F&B outlet count, seasonal slowdowns, and the absence of one-off gains that bolstered previous periods. While the headline loss is concerning, the company’s ability to generate positive cash flow from operations is a silver lining, indicating underlying operational health.
The management’s commitment to strategic initiatives in its F&B segment, focusing on service quality, cost control, and product innovation, is essential for future growth. The positive resolution of the material litigation also removes a significant uncertainty, allowing the company to dedicate resources to its core business.
For investors, key points to consider from this report include:
- The significant impact of one-off items and seasonality on reported profits, necessitating a look beyond headline figures.
- The performance and strategic direction of the F&B segment, which is crucial for the company’s overall revenue and profitability.
- The improvement in operational cash flow, suggesting better efficiency in managing day-to-day business despite the reported loss.
- The resolution of the material litigation, which de-risks the company’s legal standing.
The path forward for OASIS HARVEST CORPORATION BERHAD will largely depend on the successful execution of its strategies to revitalize its F&B business and manage its financial structure.
Final Thoughts
This quarter’s report from OASIS HARVEST CORPORATION BERHAD underscores the importance of looking beyond the immediate figures to understand the underlying drivers of performance. The company is clearly facing headwinds, but its management has articulated a plan to address them, and the positive cash flow from operations is a good sign.
What are your thoughts on OASIS HARVEST CORPORATION BERHAD’s latest performance? Do you think the company can effectively navigate the challenges in the F&B sector and return to profitability in the coming quarters? Share your views and insights in the comments section below!
