WMG Holdings Bhd. Navigates Shifting Tides: A Deep Dive into Their Latest Financials
Greetings, fellow investors and market enthusiasts! Today, we’re dissecting the latest financial report from WMG Holdings Bhd. (WMG), a prominent player in Malaysia’s property and building materials sectors. This isn’t just any ordinary quarterly update; it marks a significant transition for the company as they’ve changed their fiscal year-end from December 31, 2024, to March 31, 2025. This means we’re looking at a unique 15-month financial period, culminating in what they refer to as the “fifth quarter” ended March 31, 2025.
While the full 15-month period shows a commendable profit, the most recent quarter reveals a different story, with the company reporting a loss. This mixed bag of results, coupled with strategic shifts and ongoing litigation, makes for a fascinating read. Let’s unwrap the numbers and see what WMG’s future might hold.
Core Data Highlights: A Tale of Two Periods
Due to the change in fiscal year-end, direct year-on-year comparisons for the quarter are not available. However, we can analyze the performance over the extended 15-month period and compare the latest quarter with the immediate preceding quarter to get a clearer picture.
Fiscal Year-to-Date Performance (15 Months Ended 31 March 2025)
For the extended 15-month period, WMG Holdings Bhd. delivered a strong top-line performance and returned to profitability:
- Revenue: The Group generated a substantial RM181.113 million.
- Gross Profit: A solid RM61.997 million was recorded.
- Profit Before Tax: The company achieved a profit before tax of RM35.167 million.
- Profit After Tax: WMG concluded the 15-month period with a net profit of RM24.499 million.
- Basic Earnings Per Share (EPS): Stood at 1.27 sen.
Breaking down the revenue, the property segment was the primary driver, contributing approximately 88% (RM160.16 million) of total revenue, primarily from property sales (RM150.09 million) and property letting (RM10.07 million). The building materials segment accounted for the remaining 12% (RM20.96 million), with a significant portion (77%) of sales made to contractors engaged by the Group for its property development projects. This internal synergy highlights an integrated business model.
Latest Quarter vs. Immediate Preceding Quarter
The individual quarter ended 31 March 2025 tells a different story compared to the immediate preceding quarter ended 31 December 2024:
Current Quarter (31 March 2025)
- Revenue: RM18.877 million
- Gross Profit: RM0.957 million
- Loss Before Tax: RM(2.018) million
- Loss After Tax: RM(0.993) million
Immediate Preceding Quarter (31 December 2024)
- Revenue: RM24.914 million
- Gross Profit: RM8.289 million
- Profit Before Tax: RM2.508 million
- Profit After Tax: RM1.136 million
The Group experienced a significant decline in the latest quarter, with revenue dropping by approximately 32% (RM6.04 million) and transitioning from a profit to a loss after tax. This downturn was primarily attributed to lower property sales and the completion of two project phases, which impacted revenue recognition in the quarter.
Financial Health: A Stronger Balance Sheet
Looking at the balance sheet as of 31 March 2025 compared to 31 December 2023, WMG has made notable improvements in its financial structure:
| Financial Metric | As at 31 March 2025 (RM’000) | As at 31 December 2023 (RM’000) | Change (RM’000) |
|---|---|---|---|
| Cash and Bank Balances | 50,782 | 24,540 | +26,242 |
| Total Assets | 376,809 | 411,565 | -34,756 |
| Total Liabilities | 184,786 | 244,041 | -59,255 |
| Total Equity | 192,023 | 167,524 | +24,499 |
| Net Assets Per Share (RM) | 0.22 | 0.38 | -0.16 |
| Total Loans and Borrowings | 149,450 | 199,691 | -50,241 |
The most striking improvements are the significant increase in cash and bank balances and a substantial reduction in total liabilities, particularly loans and borrowings. This reflects strong cash generation from operations, with net cash flows from operating activities amounting to a robust RM87.850 million for the 15-month period.
While total assets decreased, the increase in total equity signifies a healthier capital structure. It’s worth noting the decrease in Net Assets Per Share, which is primarily due to the conversion of Irredeemable Convertible Preference Shares (ICPS) into ordinary shares. This conversion increased the total number of ordinary shares significantly (from 444.5 million to 867.1 million), diluting the net assets per share even as total equity grew.
WMG’s land bank for development slightly reduced to approximately 627 acres (from 653 acres), partly due to a compulsory acquisition of 10 acres in Sandakan, valued at RM3.05 million.
Risks and Prospects: Navigating the Future
Promising Prospects
Despite the recent quarterly setback, WMG’s management remains cautiously optimistic about the future. Their ongoing property developments are showing strong sales momentum:
- Parklane Garden (Sandakan): Achieved an impressive 100% sales rate as of April 2025.
- Parklane 2 (Kota Kinabalu): Reached an 82% sales rate by the end of the fifth quarter.
These projects contribute to unbilled sales of approximately RM17.44 million and unsold units with a gross development value (GDV) of RM47.35 million. This sustained momentum is expected to bolster cash flow stability and support future growth. WMG is also actively exploring new development opportunities, with several plans slated for submission in the next financial year (FY2026), indicating a proactive growth strategy.
Navigating Material Litigation
WMG is currently involved in several material litigations. It’s crucial for investors to understand these:
- Pemborong Asas Sdn. Bhd. vs Wah Mie Realty Sdn. Bhd. (CIPAA Claim 1): A claim of RM1.35 million for balance retention sum. Positively, the claimant (PASB) has since withdrawn the adjudication proceedings, indicating a potential resolution or change in strategy by the claimant.
- Wah Mie Trading Sdn. Bhd. vs Pemborong Asas Sdn. Bhd.: WMG’s subsidiary (Wah Mie Trading) is the plaintiff in this case. The case is ongoing, with the High Court hearing adjourned to July 15, 2025, pending the outcome of Wah Mie Trading’s application to strike out the proceedings in the Sessions Court. This suggests WMG is actively defending its position.
- Pemborong Asas Sdn. Bhd. vs Wah Mie Realty Sdn. Bhd. (CIPAA Claim 2): In a separate CIPAA claim, the Adjudicator has ruled in favor of WMG’s subsidiary (Wah Mie Realty), dismissing all claims by Pemborong Asas Sdn. Bhd. and ordering the claimant to bear costs of RM62,675.92. This is a significant positive outcome for WMG, demonstrating successful defense against a material claim.
The resolution of one major litigation in WMG’s favour and the withdrawal of another significant claim are positive signs, although one case remains active. The Board believes they have strong defense strategies in place.
Summary and
WMG Holdings Bhd.’s latest financial report presents a nuanced picture. The extended 15-month financial period demonstrates the company’s ability to generate substantial revenue and return to profitability, driven primarily by its property segment. The significant reduction in total liabilities and borrowings, coupled with a healthy increase in cash and net assets, points to a strengthening financial position and robust cash flow management.
However, the immediate preceding quarter’s loss highlights the inherent volatility in property sales and project completion cycles. While this quarterly dip is a point to monitor, the strong unbilled sales and GDV from ongoing projects, along with plans for new developments, suggest a positive pipeline for future revenue.
The resolution of two material litigations in the company’s favour is a welcome development, reducing potential financial exposure and legal uncertainties. The remaining active litigation will require continued attention, but the overall trend appears positive on the legal front.
Key points to consider moving forward:
- The sustainability of property sales momentum in an evolving market.
- The successful execution and launch of new development opportunities in FY2026.
- The final outcome of the remaining material litigation.
- The impact of the increased share capital on future earnings per share and dividend policy (no dividend was recommended for this period).
Final Thoughts: Steadying the Ship for Future Growth
WMG Holdings Bhd. appears to be in a transitional yet strategically sound phase. While the latest quarterly loss might raise eyebrows, it’s important to view it within the context of the strong performance over the longer 15-month period and the strategic financial improvements. The company’s focus on driving sales for existing projects, exploring new ventures, and strengthening its balance sheet indicates a proactive approach to long-term growth.
The management’s cautious optimism seems well-founded given the operational achievements and financial restructuring. The property market, particularly in Malaysia, can be dynamic, and WMG’s ability to adapt and capitalize on its land bank will be key.
What are your thoughts on WMG’s latest performance? Do you believe they can maintain this growth momentum and navigate the market challenges effectively in the coming years? Share your insights in the comments below!
