Navigating the Palm: A Deep Dive into Matang Berhad’s Q3 FY2025 Performance
Greetings, fellow investors and keen observers of the Malaysian market! Today, we’re unpeeling the layers of Matang Berhad’s latest financial report for the third quarter ended 31 March 2025. This report offers a glimpse into the performance of a key player in Malaysia’s agricultural sector, primarily focusing on oil palm and durian cultivation. While the company has shown commendable growth in revenue and profit compared to the same period last year, it also highlights the inherent volatilities of the commodities market and strategic adjustments for future resilience. Let’s delve into the numbers and understand what’s shaping Matang’s journey.
Key Takeaway: Matang Berhad demonstrated robust growth in its third financial quarter, with a significant increase in Profit Before Taxation, largely driven by improved Fresh Fruit Bunch (FFB) prices. However, the report also signals a more cautious outlook due to fluctuating commodity prices and a slight dip in FFB production.
Core Financial Highlights: A Quarter of Growth Amidst Market Shifts
Matang Berhad’s third quarter performance paints a picture of resilience and strategic adaptation. The Group recorded a notable increase in its operating revenue and profit before taxation, primarily fueled by stronger FFB prices, even as FFB production saw a slight decline. Let’s break down the key figures:
Revenue Performance: Stronger Prices Offset Production Dip
For the quarter ended 31 March 2025, Matang Berhad’s operating revenue saw a healthy uplift, largely attributed to a significant increase in FFB prices. Despite a marginal dip in FFB production, the higher prices compensated effectively.
Q3 FY2025 Revenue
RM 4.48 million
(Primarily RM4.43 million from FFB sales)
Q3 FY2024 Revenue
RM 3.61 million
This represents a robust 24.1% increase in operating revenue compared to the corresponding quarter in the preceding year. The average FFB price realised surged by 27.5% to RM1,047 per tonne, even though FFB production decreased by 3.4% to 4,232 tonnes. Durian sales also contributed, albeit a smaller portion, increasing from RM0.02 million to RM0.05 million.
Profitability: A Significant Leap
The higher revenue directly translated into improved profitability for Matang Berhad. Both gross profit and profit before taxation experienced substantial gains, showcasing the company’s ability to manage costs relative to revenue growth.
Q3 FY2025 Profit Before Taxation (PBT)
RM 1.80 million
Q3 FY2024 Profit Before Taxation (PBT)
RM 0.92 million
This marks an impressive 95.7% increase in PBT. Gross profit also climbed by 31.7% to RM3.03 million, driven by higher revenue outpacing the increase in cost of sales. Other income also contributed positively, rising by 20.2% to RM1.13 million, while administration expenses remained relatively consistent.
Earnings Per Share
For the current financial quarter, the basic Earnings Per Share (EPS) stood at 0.04 sen. The company’s net profit attributable to ordinary equity holders for the quarter was RM0.935 million.
Comparison with Immediate Preceding Quarter
While the year-on-year comparison is strong, a look at the immediate preceding quarter (Q2 FY2025) reveals a different trend. The Group’s PBT for the current quarter (RM1.80 million) decreased by approximately 37.5% compared to the RM2.88 million recorded in the quarter ended 31 December 2024. This decrease is primarily attributed to lower FFB revenue in the current quarter, highlighting the seasonal and cyclical nature of the plantation business.
Strategic Focus: Private Placement Utilisation and Durian Development
Matang Berhad has been actively managing its capital from private placement exercises. For the private placement undertaken in 2021 (PP 2021), RM0.56 million was utilised as working capital for the durian plantation during the quarter, leaving a balance of RM8.72 million. This demonstrates the company’s commitment to developing its durian segment.
Furthermore, the unutilised balance of RM14.02 million from the 2022 private placement (PP 2022) has been re-earmarked for working capital requirements. This includes RM10 million for development and operational expenditures for both oil palm and durian plantations, and RM4.02 million specifically for downstream durian activities, such as processing and subsequent operational expenses. This strategic re-allocation underscores Matang’s intent to strengthen its core operations and explore value-added opportunities in the durian sector.
Risks and Prospects: Navigating a Volatile Landscape
The plantation sector, by its nature, is exposed to various external factors, primarily commodity price fluctuations and weather conditions. Matang Berhad’s prospects are intrinsically linked to the dynamics of the Crude Palm Oil (CPO) market and its strategic diversification into durian.
CPO Price Volatility
The report acknowledges the recent softening of CPO prices. The monthly average CPO price for the quarter under review was RM4,723.8 per tonne, a slight decrease from the immediately preceding quarter’s average of RM4,839.5 per tonne. Post-quarter, CPO prices continued to show a gradual decline in April and fluctuated in early May 2025.
Industry analysts offer varied outlooks: Maybank Investment Bank maintains a RM4,000 per tonne CPO average forecast for 2025, anticipating current spot prices to hold until late Q3 amidst a seasonal pick-up in output. MIDF Research is slightly more optimistic, targeting an average CPO price of RM4,300 per tonne for 2025, expecting prices to remain “relatively sticky” despite likely underperforming production.
Production Outlook and Market Support
While palm oil stocks in Malaysia are projected to rise from April onwards, the build-up is expected to be moderate. This moderation is attributed to weak year-on-year production growth, particularly in Sabah, which could limit inventory accumulation and provide some support to palm oil prices. The recovery in soybean oil prices is also seen as a factor enhancing palm oil’s price competitiveness, helping to keep prices supported around RM3,900. However, escalating trade conflicts and soft crude oil prices introduce higher risk and price volatility, suggesting that a strong rally in vegetable oil prices is unlikely.
Strategic Resilience
Matang Berhad’s focus on operational efficiency, coupled with its strategic investments in the durian segment and potential downstream activities, positions it to mitigate some of the risks associated with CPO price volatility. The re-allocation of private placement proceeds towards working capital and durian development demonstrates a proactive approach to enhancing long-term sustainability and value creation.
Dividend Announcement
It’s important to note that while the company previously paid a final single-tier dividend of 0.16 sen per ordinary share (amounting to approximately RM3.82 million) on 8 January 2025 for the financial year ended 30 June 2024, the Board of Directors does not recommend any dividend for the current financial quarter under review.
Summary and
Matang Berhad’s third-quarter results for FY2025 reflect a strong year-on-year growth in revenue and profitability, primarily driven by favourable FFB prices. This indicates a robust operational performance despite a slight dip in FFB production. The company’s strategic re-allocation of private placement funds towards working capital and the development of its durian business, including potential downstream activities, points to a forward-looking approach aimed at enhancing long-term value and diversifying revenue streams. However, the immediate quarter-on-quarter decline in PBT and the prevailing volatility in global commodity markets, particularly CPO prices, underscore the challenges inherent in the sector.
As a senior blogger, I am not here to provide . My aim is to provide a comprehensive analysis of the company’s performance based on its official report. Investors should always conduct their own due diligence and consider multiple factors before making any investment decisions.
Key risk points to consider from this report include:
- Commodity Price Volatility: The significant impact of FFB and CPO price fluctuations on revenue and profitability remains a primary concern.
- Production Variations: Seasonal crop patterns and weather conditions can affect FFB production volumes, influencing overall output.
- Global Economic Factors: Broader economic conditions, trade conflicts, and crude oil prices can indirectly affect vegetable oil prices and market sentiment.
- Execution Risk of Diversification: While durian cultivation and downstream activities offer diversification, successful execution and market penetration will be crucial.
Looking Ahead: Cultivating Future Growth
Matang Berhad appears to be navigating the current economic landscape with a balanced approach, capitalising on market opportunities while prudently managing its resources. The company’s strategic focus on both oil palm and durian, coupled with its efforts to optimise capital utilisation, suggests a commitment to sustainable growth. The CPO market remains a critical determinant, but Matang’s proactive steps in diversification and operational efficiency may help cushion against potential headwinds.
What are your thoughts on Matang Berhad’s latest performance? Do you believe their strategy of developing the durian segment will yield significant returns in the long run? Share your insights in the comments below!
Stay tuned for more in-depth analyses of Malaysian companies. For further reading, you might be interested in our previous articles on [Related Article 1 Title] and [Related Article 2 Title].
