Navigating the Headwinds: A Closer Look at EMICO HOLDINGS BERHAD’s Latest Financials
Greetings, fellow investors! Today, we’re diving deep into the latest financial report from EMICO HOLDINGS BERHAD (Company No: 230326-D) for the quarter and year ended 31 March 2025. This report provides a comprehensive look at the company’s performance, revealing both the challenges it has faced and the strategic initiatives it’s undertaking to chart a course for future growth. While the full-year results show a shift to a loss, the underlying segments are making proactive moves to capitalize on new market opportunities. Let’s break down the numbers and understand what this means for the company’s journey ahead.
Financial Performance: A Mixed Bag
EMICO Holdings’ latest report reflects a period of adjustment, with the company experiencing a contraction in revenue and a shift from profit to loss on a full-year basis. However, a quarter-on-quarter comparison shows some signs of improvement in managing losses.
Quarterly Snapshot (3 Months Ended 31 March 2025 vs 31 March 2024)
The final quarter of the financial year saw a decline in revenue, primarily due to lower sales from the trophy business. Despite this, the company managed to narrow its net loss compared to the same period last year.
Q4 FY2025
Revenue: RM13,036k
Gross Profit: RM2,259k
Operating Loss: RM(374)k
Loss Before Tax: RM(597)k
Loss for the Period: RM(640)k
Basic Loss Per Share: (0.48) sen
Q4 FY2024
Revenue: RM15,204k
Gross Profit: RM3,012k
Operating Profit: RM1,096k
Profit Before Tax: RM928k
Loss for the Period: RM(981)k
Basic Loss Per Share: (0.71) sen
Revenue for the quarter decreased by 14.3% from RM15.204 million to RM13.036 million. This led to a shift from an operating profit of RM1.096 million to an operating loss of RM0.374 million. However, it’s notable that the loss for the period attributable to equity holders improved from RM(889)k to RM(633)k, and basic loss per share narrowed from (0.71) sen to (0.48) sen, indicating some level of cost control or reduced impact from other factors.
Full-Year Performance (12 Months Ended 31 March 2025 vs 31 March 2024)
The full financial year paints a more challenging picture, with a notable decline in overall profitability, shifting from a profit to a loss position.
FY2025
Revenue: RM57,563k
Gross Profit: RM10,592k
Operating Profit: RM307k
Loss Before Tax: RM(311)k
Loss for the Period: RM(1,144)k
Basic Loss Per Share: (0.84) sen
FY2024
Revenue: RM61,017k
Gross Profit: RM14,229k
Operating Profit: RM6,027k
Profit Before Tax: RM5,523k
Profit for the Period: RM2,735k
Basic Earnings Per Share: 2.29 sen
For the full year, revenue decreased by 5.7% to RM57.563 million. The company reported a loss before tax of RM0.311 million, a significant reversal from the RM5.523 million profit before tax in the previous year. This decline was primarily attributed to the weakening of the U.S. dollar against the Ringgit, which unfavorably impacted the trophy export business. Additionally, a sales return related to the rework of trophy products, amounting to RM1.712 million, further weighed on performance. It’s also worth noting that the previous year’s higher profit was partly boosted by an insurance claim of RM1.27 million.
Segmental Performance: A Deeper Dive
Understanding the contribution of each business unit is crucial for a complete picture:
| Segment (12 Months Ended 31 March) | Revenue FY2025 (RM’000) | Revenue FY2024 (RM’000) | PBT/LBT FY2025 (RM’000) | PBT/LBT FY2024 (RM’000) |
|---|---|---|---|---|
| Manufacturing and Trading | 57,397 | 61,017 | 1,127 (PBT) | 7,264 (PBT) |
| Property Development | 166 | 0 | (251) (LBT) | (651) (LBT) |
| Investment Holdings | 492 | 492 | (1,187) (LBT) | (1,090) (LBT) |
The **Manufacturing and Trading** division, the largest contributor, saw its revenue decline by 5.9% and its profit before tax (PBT) decrease significantly by 84.5%. This was largely due to the unfavorable foreign exchange translation from the weaker U.S. dollar and the RM1.712 million sales return for trophy product rework. The prior year’s PBT also included an insurance claim of RM1.27 million, which was not present this year.
The **Property Development** division generated RM0.166 million in revenue this period, compared to none last year, and managed to reduce its loss before tax (LBT) from RM0.651 million to RM0.251 million, indicating progress in its projects.
The **Investment Holding** division recorded a higher LBT of RM1.187 million, primarily due to expenses incurred for the private placement, amounting to RM0.120 million.
Financial Health: Balance Sheet and Cash Flow
As of 31 March 2025, EMICO Holdings’ total assets increased to RM98.900 million from RM88.759 million in the previous year. Total equity also saw a slight increase to RM61.381 million. However, net assets per share slightly decreased to RM0.40 from RM0.42. The company’s cash and cash equivalents significantly decreased to RM2.139 million from RM7.405 million, reflecting a shift to cash outflow from operating activities.
The cash flow statement indicates that operating activities used RM4.623 million in cash for the full year, a reversal from generating RM5.183 million in the prior year. This highlights the impact of the lower profitability. The company did, however, generate RM4.192 million from financing activities, mainly driven by the proceeds from a private placement and net drawdown of bank borrowings, which helped to partially offset the cash used in operations and investing activities.
Risks and Strategic Outlook
While the financial results reflect current challenges, EMICO Holdings is actively pursuing strategies to mitigate risks and capitalize on emerging opportunities.
For the **OEM segment**, the company is seeing increased demand for specific product series from existing customers and strong momentum for replacement components, providing a stable revenue stream. Strategic alliances are being actively pursued to drive long-term growth.
The **Trophy division** stands to benefit significantly from the recent increase in tariffs on Chinese exports to the U.S. This has opened doors for Emico, with existing U.S. customers expressing interest in expanding their product range and discussions with major U.S. trophy companies showing encouraging initial feedback. Locally, while demand was soft, it’s gradually improving, with new product lines set to launch in June 2025, focusing on higher-margin mid-range and competitively priced metal cup trophies.
In the **Trading division (furniture)**, encouraging responses from the UK Birmingham Furniture and Furnishing Show and a new product development project with a leading U.S. furniture importer, driven by global supply chain shifts, are expected to establish a new revenue stream. The company is optimistic about this collaboration.
The **Property Development** division has successfully completed 21 units of shop lots at Platinum Commercial Centre, with Certificate of Completion and Compliance (CCC) obtained in May 2025. Marketing efforts are underway, and planning for the next development phases in Bandar Mutiara and Taman Batik is in progress.
Overall, the Group maintains an optimistic outlook for the financial year ending 31 March 2026, despite uncertainties arising from fluctuating tariff policies. They emphasize a cautious and prudent approach to operations, focusing on sound governance and long-term sustainability.
Summary and Key Takeaways
EMICO Holdings’ latest financial report indicates a challenging period marked by revenue contraction and a full-year loss, primarily influenced by foreign exchange fluctuations and specific sales returns in its core manufacturing and trading segment. The shift to a cash outflow from operations further underscores the need for effective working capital management.
However, the report also highlights the company’s proactive strategic responses. The completion of property development projects, the pursuit of new OEM and furniture market opportunities, and the strategic advantage from U.S. tariffs on Chinese exports in the trophy business are all positive indicators of future potential. While the immediate financial performance presents hurdles, the management’s focus on new product lines, market expansion, and strategic alliances suggests a clear path towards recovery and growth.
Key areas for investors to monitor include:
- The successful realization of revenue from new product lines and strategic alliances in the Manufacturing and Trading division, particularly leveraging the U.S. tariff situation.
- The progress and sales uptake of the completed Platinum Commercial Centre units and the development of future property projects.
- The impact of foreign exchange rate stability on the company’s export-oriented businesses.
- The effective management of operating costs and cash flows to return to a positive cash generation from operations.
EMICO Holdings is clearly in a phase of strategic adaptation, navigating market headwinds while actively seeking new growth avenues. Do you think the company’s strategic initiatives, especially in the OEM and trophy segments, will be enough to turn the tide and bring the company back to profitability in the coming years? Share your thoughts in the comments below!
Stay tuned for more insights into Malaysian companies’ financial performance.
