Navigating the currents of the Malaysian economy, companies continue to release their quarterly reports, offering a glimpse into their performance and future outlook. Today, we delve into BWYS GROUP BERHAD’s latest interim financial report for the First Quarter ended 31 March 2025. This report presents a mixed bag of results, highlighting the company’s resilience in a challenging market, even as revenue dipped, its profit before tax saw a commendable increase. Let’s break down the key takeaways that every Malaysian retail investor should know.
BWYS GROUP BERHAD: Q1 2025 Performance Highlights
BWYS Group, a prominent player in the manufacturing, sale, and rental of steel and metal-related products, faced a challenging quarter marked by softer market demand and global trade tensions. Despite these headwinds, the company demonstrated a notable improvement in profitability.
Overall Financial Performance (Q1 2025 vs. Q1 2024)
For the first quarter ended 31 March 2025, BWYS Group recorded a revenue of RM57.33 million, a decrease of 12.31% compared to RM65.38 million in the same period last year. This decline was primarily driven by softer market demand and lower overall average selling prices, influenced by the global steel price. Furthermore, trade tensions, particularly with the United States of America imposing a 25% import duty on steel, led many customers to delay capital expenditure decisions, impacting order placements.
However, despite the revenue dip, the Group’s Profit Before Tax (PBT) showed a strong recovery, increasing by 9.66% to RM4.20 million, up from RM3.83 million in the preceding corresponding quarter. This increase in profitability was mainly due to lower material costs, benefiting from the softer global steel prices, and a significant 30% increase in other operating income, largely from machinery rental.
Q1 2025 (Unaudited)
Revenue: RM57,329,000
Profit Before Tax: RM4,203,000
Profit After Tax: RM2,628,000
Basic & Diluted EPS: 0.26 sen
Q1 2024 (Unaudited)
Revenue: RM65,384,000
Profit Before Tax: RM3,832,000
Profit After Tax: RM2,673,000
Basic & Diluted EPS: 0.26 sen
In terms of geographical contribution, Malaysia remains the Group’s largest market, accounting for RM55.10 million (96.12%) of the total revenue. The United States of America was the largest foreign market, contributing RM1.14 million (1.99%) to revenue, with other countries like Singapore, Australia, and Bangladesh making up the remainder.
Comparison with Immediate-Preceding Quarter (Q1 2025 vs. Q4 2024)
Comparing the current quarter with the immediate preceding quarter (Q4 2024), BWYS Group saw a modest increase in revenue but a decline in profit before tax.
Q1 2025 (Unaudited)
Revenue: RM57,329,000
Profit Before Tax: RM4,203,000
Q4 2024 (Audited)
Revenue: RM54,898,000
Profit Before Tax: RM4,925,000
Revenue increased by 4.43% from RM54.90 million in Q4 2024 to RM57.33 million in Q1 2025. This improvement in sales was mainly due to higher average selling prices for scaffolding, steel materials, and related products, supported by growing demand from the construction sector and existing customers.
However, profit before tax decreased by 14.66% from RM4.92 million in Q4 2024 to RM4.20 million in Q1 2025. This was primarily due to lower other operating income, as the preceding quarter benefited from a gain on disposal of rental scaffoldings, and higher administrative expenses in the current quarter, including salary increments and a loss on disposal of rental scaffolding.
Financial Health and Cash Flow
As of 31 March 2025, BWYS Group’s balance sheet reflects a healthy financial position. Net assets per share increased slightly to RM0.22 from RM0.21 as of 31 December 2024, with total equity growing to RM220.45 million from RM217.83 million.
The Group’s total borrowings decreased to RM125.98 million from RM143.34 million at the end of 2024, indicating effective debt management. Cash and bank balances stood at RM56.94 million, a decrease from RM75.46 million at the end of last year, primarily due to significant cash outflows from financing activities.
Looking at cash flows, the Group generated RM1.21 million from operating activities for the period ended 31 March 2025, compared to RM1.51 million in the same period last year. Notably, net cash used in financing activities increased significantly to RM22.66 million from RM0.51 million, mainly due to net repayments of bankers’ acceptances and lease liabilities.
Regarding the utilisation of IPO proceeds, as of 31 March 2025, BWYS Group has utilised RM25.41 million out of the RM56.39 million gross proceeds. Key areas of utilisation include capital expenditure for the new Penang factory and working capital, with RM30.97 million remaining for future strategic initiatives.
Risks and Prospects: Navigating the Future
The steel market continues to present challenges, characterized by softer demand, overcapacity, and lower average selling prices. Global policy uncertainties and escalating trade tensions, such as the US import duty on steel, are contributing to a cautious approach among buyers, leading to delayed capital expenditures and slower order placements.
However, the domestic construction sector in Malaysia remains a strong pillar of support. The industry recorded a robust 20.2% year-on-year growth in 2024, reaching RM158.8 billion. BWYS Group is strategically positioned to benefit from major infrastructure projects like the Penang Light Rail Transit (LRT), East Coast Rail Link (ECRL), and Mass Rapid Transit 3 (MRT3), which are expected to drive significant demand for its CIDB-certified shoring systems.
In response to market challenges, the Group’s strategy focuses on optimizing inventory management, stringent cost control, and enhancing operational efficiency to bolster financial resilience. Furthermore, BWYS Group is committed to exploring product innovation and adopting advanced manufacturing technologies to strengthen its market position.
While global uncertainties persist, the Group maintains a cautiously optimistic outlook for its long-term growth, underpinned by its strategic initiatives and the robust domestic construction landscape.
Summary and
BWYS Group Berhad’s Q1 2025 report showcases a company adept at navigating challenging market conditions. While revenue faced headwinds from global steel prices and trade tensions, the Group’s ability to increase its profit before tax through cost management and diversified income streams is a positive sign of operational efficiency. The strong domestic construction sector and major infrastructure projects offer a solid foundation for future demand, providing a crucial counterbalance to international market volatility.
This blog post aims to provide an objective analysis of BWYS Group’s latest financial report. It is important to note that this content is for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any securities. Retail investors should conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions.
Key points from the report that warrant attention include:
- The resilience in profit before tax despite a revenue decline, indicating effective cost management and higher other operating income.
- The strategic focus on the robust domestic construction sector and its potential demand drivers from major infrastructure projects.
- Ongoing efforts in optimising inventory, controlling costs, and exploring product innovation to enhance market position.
- The decrease in total borrowings, reflecting prudent financial management.
BWYS Group’s Q1 2025 performance underscores the importance of adaptability in today’s dynamic economic environment. The company’s strategic focus on domestic opportunities and operational efficiency positions it to weather external challenges. Do you think BWYS Group can maintain this growth momentum in the coming quarters by leveraging these domestic projects? Share your thoughts and insights in the comments section below!
Stay tuned for more in-depth analyses of company reports and market trends relevant to Malaysian retail investors.
