Greetings, fellow investors and logistics enthusiasts!
Today, we’re diving into the latest financial heartbeat of
, a prominent player in Malaysia’s logistics sector. The company has just released its unaudited third-quarter results for the period ended 31 March 2025, and there’s plenty to unpack. While the full-year revenue growth continues to impress, the latest quarter reveals a more nuanced picture, with some challenges impacting profitability. Let’s explore the numbers together to understand what’s driving their performance and what lies ahead.
This report highlights a period of significant revenue expansion for FM Global Logistics, underscoring its growing market presence. However, a closer look at the quarterly figures shows that this growth comes with increased operational costs and financial pressures, leading to a dip in the latest quarter’s profit. Despite these headwinds, the company’s long-term trajectory and strategic initiatives remain key points of interest for Malaysian retail investors like us.
Q3 FY2025 Performance: A Mixed Bag
Let’s start by examining the company’s performance for the individual quarter ended 31 March 2025, compared to the same period last year. While revenue saw a healthy increase, profit metrics experienced a contraction, signaling rising costs and other operational factors at play.
Revenue Growth Sustained
FM Global Logistics continued its revenue growth trajectory in the third quarter. This indicates strong demand for their logistics services and effective market penetration strategies.
Q3 FY2025
Revenue: RM225,522,000
Q3 FY2024
Revenue: RM206,754,000
This represents a robust 9% increase in revenue, a positive sign for the company’s top-line performance.
Profitability Under Pressure
Despite the revenue growth, the company’s profitability saw a notable decline in the quarter. This was primarily due to a disproportionate increase in operating expenses and higher finance costs.
Q3 FY2025
Profit from Operations: RM13,301,000
Profit Before Tax: RM11,440,000
Profit for the Period: RM7,840,000
Profit Attributable to Owners: RM6,983,000
Basic Earnings Per Share: 1.25 sen
Q3 FY2024
Profit from Operations: RM14,472,000
Profit Before Tax: RM13,428,000
Profit for the Period: RM9,858,000
Profit Attributable to Owners: RM9,029,000
Basic Earnings Per Share: 1.62 sen
The profit from operations decreased by 8%, while profit before tax saw a steeper decline of 15%. The profit attributable to owners of the parent decreased by 23%, translating to a 23% drop in basic earnings per share, from 1.62 sen to 1.25 sen. This indicates that rising costs are eroding the benefits of increased revenue.
Furthermore, finance costs surged by 18%, reflecting higher borrowing costs, and the share of profits from joint ventures significantly decreased by 51%, impacting the bottom line.
Cumulative 9-Month Performance: A Broader View
Looking at the cumulative nine months ended 31 March 2025, the picture is more positive on the top line, with some mixed signals on profitability.
Solid Cumulative Revenue Growth
For the first nine months of the financial year, FM Global Logistics demonstrated strong overall growth in revenue.
9M FY2025
Revenue: RM722,282,000
9M FY2024
Revenue: RM595,904,000
This represents an impressive 21% increase in revenue year-to-date, showcasing the company’s ability to expand its operations over a longer period.
Slight Dip in Cumulative Profit
While revenue grew significantly, cumulative profit for the nine months saw a marginal decline, primarily due to factors similar to those affecting the quarterly performance.
9M FY2025
Profit Before Tax: RM36,774,000
Profit for the Period: RM26,407,000
Profit Attributable to Owners: RM23,048,000
Basic Earnings Per Share: 4.13 sen
9M FY2024
Profit Before Tax: RM36,232,000
Profit for the Period: RM26,708,000
Profit Attributable to Owners: RM24,240,000
Basic Earnings Per Share: 4.34 sen
Profit before tax saw a slight 1% increase, but profit for the period decreased by 1%, and profit attributable to owners of the parent fell by 5%. Basic earnings per share also saw a 5% decrease, from 4.34 sen to 4.13 sen. This indicates that while the company is growing its top line, managing costs and maintaining profit margins remains a key challenge in the current environment.
Quarter-on-Quarter Comparison (Q3 FY2025 vs Q2 FY2025)
Comparing the latest quarter (Q3 FY2025) with the immediate preceding quarter (Q2 FY2025) provides insights into recent operational trends.
Q3 FY2025
Revenue: RM225,522,000
Profit Before Tax: RM11,440,000
Profit for the Period: RM7,840,000
Profit Attributable to Owners: RM6,983,000
Basic Earnings Per Share: 1.25 sen
Q2 FY2025
Revenue: RM243,051,000
Profit Before Tax: RM13,470,000
Profit for the Period: RM10,256,000
Profit Attributable to Owners: RM8,808,000
Basic Earnings Per Share: 1.58 sen
From Q2 to Q3, revenue declined by 7%, and profit before tax dropped by 15%. Profit attributable to owners saw a 21% decrease, and basic EPS fell by 21%. This quarter-on-quarter decline suggests a recent slowdown in business activity or increased cost pressures within the current financial year.
Financial Health: Balance Sheet & Cash Flow
Statement of Financial Position (Balance Sheet)
As of 31 March 2025, FM Global Logistics’ total assets stood at RM867,423,000, an increase from RM824,823,000 at 30 June 2024. This growth in assets is primarily driven by an increase in property, plant, and equipment, and receivables. However, total liabilities also increased significantly to RM420,678,000 from RM372,411,000, mainly due to higher payables and short-term borrowings. Total equity saw a slight decrease to RM446,745,000 from RM452,412,000, leading to a marginal dip in net assets per share attributable to owners from RM0.77 to RM0.76.
| Metric | As at 31 March 2025 (RM’000) | As at 30 June 2024 (RM’000) |
|---|---|---|
| Total Assets | 867,423 | 824,823 |
| Total Equity | 446,745 | 452,412 |
| Total Liabilities | 420,678 | 372,411 |
| Net Assets per Share (RM) | 0.80 | 0.81 |
Cash Flow Statement
For the nine months ended 31 March 2025, the company generated healthy cash from operating activities, with net cash generated increasing to RM44,126,000 from RM28,659,000 in the prior year. This is a strong indicator of the company’s core business generating sufficient cash. However, investing activities continued to be a net cash outflow, though significantly reduced to RM15,563,000 from RM53,755,000, mainly due to lower acquisition of property, plant, and equipment. Financing activities saw a substantial increase in net cash used, primarily due to higher repayments of borrowings and lease liabilities, leading to a net decrease in cash and cash equivalents for the period.
9M FY2025
Net Cash from Operating Activities: RM44,126,000
Net Cash Used in Investing Activities: (RM15,563,000)
Net Cash Used in Financing Activities: (RM32,280,000)
Cash & Cash Equivalents at Period End: RM80,292,000
9M FY2024
Net Cash from Operating Activities: RM28,659,000
Net Cash Used in Investing Activities: (RM53,755,000)
Net Cash Used in Financing Activities: (RM8,243,000)
Cash & Cash Equivalents at Period End: RM79,083,000
Risks and Prospects
The logistics industry is dynamic, influenced by global trade, economic conditions, and fuel prices. FM Global Logistics’ performance reflects some of these broader trends. While the company has demonstrated strong revenue growth, especially cumulatively, the recent quarterly decline in profitability indicates that the rising cost environment, including higher operating expenses and finance costs, poses a significant challenge. The reduction in joint venture contributions and negative foreign currency translation differences also add to the headwinds.
Looking ahead, the company’s ability to manage these costs effectively will be crucial. Strategies for optimizing operational efficiency, negotiating favorable terms with suppliers, and hedging against currency fluctuations could help mitigate some of these impacts. The continued investment in property, plant, and equipment suggests a focus on expanding capacity and modernizing operations, which could support future growth and efficiency. The healthy operating cash flow provides a solid foundation, but increased financing outflows will need careful management to maintain a robust financial position.
The company’s focus on maintaining strong revenue growth in a competitive logistics landscape is commendable. However, the current economic climate, characterized by inflation and higher interest rates, will likely continue to pressure profit margins. FM Global Logistics’ agility in adapting to these market conditions and its strategic investments will determine its ability to convert top-line growth into sustainable bottom-line performance.
Summary and
FM Global Logistics Holdings Berhad’s latest quarterly report presents a mixed yet intriguing picture. The company continues to achieve commendable top-line growth, as evidenced by the impressive 21% cumulative revenue increase for the nine months. This indicates a strong market presence and effective business development. However, the latest quarter’s performance reveals a significant challenge in profitability, with net profit declining by 20% compared to the same period last year and a 24% drop from the immediate preceding quarter. This suggests that while the company is expanding its operations, it’s simultaneously grappling with rising operational costs and finance expenses.
The healthy cash flow from operations is a definite positive, demonstrating the underlying strength of its core business. However, the substantial increase in cash used for financing activities, primarily due to higher debt and lease repayments, warrants attention. The balance sheet shows an increase in total assets, but also a rise in liabilities, resulting in a slight decrease in net assets per share. This indicates a period of investment and expansion, but also highlights the need for prudent financial management to ensure sustainable growth.
For Malaysian retail investors, it’s important to weigh the company’s strong revenue generation capabilities against the current pressures on profitability. The logistics sector is inherently sensitive to economic cycles and global trade dynamics. While FM Global Logistics has proven its ability to grow its market share, its capacity to convert this into consistent, higher earnings will depend on its strategies for cost control and efficiency improvements in the coming quarters.
Key points to monitor moving forward include:
- Cost Management: How effectively can the company control its operating expenses and finance costs in an inflationary environment?
- Profit Margin Trends: Will the company be able to reverse the recent trend of declining profit margins and improve its bottom line?
- Joint Venture Performance: Can contributions from joint ventures recover and provide a more stable stream of income?
- Debt Management: How will the company manage its increasing liabilities and financing outflows, especially in a rising interest rate environment?
- Strategic Investments: Will the ongoing investments in assets translate into future revenue growth and improved operational efficiency?
In my view, FM Global Logistics is navigating a challenging period where top-line growth is strong, but profitability is under pressure. Their ability to adapt to rising costs and optimize their operational efficiency will be crucial for future success. The healthy operating cash flow provides a good buffer, but the increased financing activities will need close monitoring.
What are your thoughts on FM Global Logistics’ latest performance? Do you believe they can maintain this growth momentum while improving profitability in the coming quarters? Share your insights in the comments below!
