Advancecon Holdings Berhad: A Resounding Turnaround in Q1 2025!
Greetings, fellow investors and market watchers! Today, we’re diving deep into the latest interim financial report for the first quarter ended 31 March 2025 from Advancecon Holdings Berhad. This report isn’t just a set of numbers; it tells a compelling story of resilience and a significant return to profitability after a challenging period. The company has not only boosted its revenue but has also managed to swing from a substantial loss to a healthy profit, demonstrating stronger operational execution. Let’s break down the key highlights that caught our attention and what they mean for this Malaysian infrastructure and green energy player.
Core Financial Highlights: A Remarkable Rebound
Advancecon’s first quarter of 2025 showcases an impressive financial recovery. The Group has successfully reversed its fortunes, moving from a loss-making position to a profitable one, driven by increased operational efficiency and demand.
Q1 2025 Performance
Revenue: RM 101.2 million
Profit Before Taxation: RM 1.9 million
Profit After Taxation: RM 1.8 million
Profit Attributable to Owners: RM 1.0 million
Basic Earnings Per Share: 0.17 sen
Compared to Q1 2024
Revenue: RM 94.0 million
Loss Before Taxation: RM (12.5) million
Loss After Taxation: RM (12.7) million
Loss Attributable to Owners: RM (14.5) million
Basic Loss Per Share: (2.52) sen
The Group’s revenue increased by 7.7% to RM 101.2 million compared to RM 94.0 million in the same period last year. More significantly, the company swung from a loss before taxation of RM 12.5 million in the preceding year’s corresponding quarter to a profit before taxation of RM 1.9 million, marking an impressive 115.3% improvement. This positive momentum also translated into a profit attributable to owners of RM 1.0 million, a stark contrast to the RM 14.5 million loss recorded in the prior year.
Segmental Performance: The Engines of Growth
Breaking down the performance by segment reveals the specific drivers behind Advancecon’s improved results:
- Construction and Support Services: This segment recorded a profit before taxation of RM 0.3 million, a substantial turnaround from a loss of RM 15.2 million in the same period last year. This improvement is primarily attributed to stronger execution and project management, overcoming previous challenges from prolonged project completions.
- Quarry Segment: Contributing a significant 60.2% to the total revenue, this division reported a profit before taxation of RM 1.9 million. While this is lower than the RM 3.7 million profit in the same period last year, it’s crucial to note that the previous year’s figure included a one-off non-operating gain of RM 4.6 million from asset disposal. The current quarter’s profitability is driven by higher revenue due to increased demand, indicating healthy operational performance.
- Green Energy Segment: This segment achieved a profit before taxation of RM 0.1 million, a positive shift from a loss of RM 0.4 million in the prior year. The LSS4 project, which commenced operations at the end of 2024, is now contributing positively to the Group’s bottom line.
- Development and Property Investment Segments: Both segments showed reduced losses compared to the preceding year’s corresponding quarter, mainly due to lower staff costs, administrative expenses, and higher rental income.
Comparison with Preceding Quarter (Q1 2025 vs Q4 2024)
The positive trend isn’t just against the previous year; Advancecon also showed sequential improvement:
Q1 2025 Performance
Revenue: RM 101.2 million
Profit Before Taxation: RM 1.9 million
Profit Attributable to Owners: RM 1.0 million
Compared to Q4 2024
Revenue: RM 100.5 million
Loss Before Taxation: RM (1.9) million
Loss Attributable to Owners: RM (3.6) million
Revenue saw a slight increase of 0.7% from the preceding quarter, but the most striking aspect is the swing from a loss before tax of RM 1.9 million in Q4 2024 to a profit of RM 1.9 million in Q1 2025. This sustained improvement is a testament to continuous demand in the Quarry segment and enhanced project management in Construction and Support Services.
Financial Health: Strengthening the Foundation
A quick look at the balance sheet and cash flow statement reinforces the positive narrative:
| Financial Metric | As at 31 March 2025 | As at 31 December 2024 |
|---|---|---|
| Total Assets | RM 529,186,349 | RM 531,469,929 |
| Total Equity | RM 159,777,594 | RM 157,945,974 |
| Total Liabilities | RM 369,408,755 | RM 373,523,955 |
| Net Asset Per Share | RM 0.28 | RM 0.27 |
While total assets saw a marginal decrease, total equity increased, and total liabilities decreased, leading to a slight rise in net asset per share. More importantly, the Group generated a net cash flow of RM 10.6 million from operating activities in Q1 2025, a significant improvement from the RM 15.4 million net cash used in operations in the same period last year. This strong operational cash generation indicates better liquidity and financial management.
Prospects and Strategic Direction
The outlook for Advancecon appears promising, bolstered by a stable macroeconomic environment and strategic initiatives.
The Malaysian economy is expected to maintain healthy GDP growth of 4.5% to 5.0% for the full year 2025, supported by ongoing infrastructure projects and increasing digital and green investments. This positive economic backdrop provides a fertile ground for Advancecon’s core businesses.
As at 31 March 2025, Advancecon boasts a robust outstanding order book of approximately RM 685 million, which is expected to support operations for the next two years. Furthermore, the Group recently secured an additional RM 106 million in new contracts in May 2025, further strengthening its construction segment’s pipeline. The stability of the Overnight Policy Rate (OPR) at 3.00% is also a positive sign, with expectations for it to ease in 2025, potentially lowering borrowing costs and further stimulating economic activity.
Advancecon’s strategy moving forward is clear: focus on efficient execution of current projects while actively seeking new opportunities in key growth sectors such as infrastructure, renewable energy, and property development. The company is also committed to implementing effective cost control measures to navigate ongoing geopolitical uncertainties. The continued contribution from the LSS4 project in the green energy segment is expected to be a consistent positive factor. The Group’s alignment with the government’s push for sustainable development positions it well to capitalize on future opportunities.
Summary and
Advancecon Holdings Berhad’s first quarter 2025 results signal a strong operational and financial turnaround. The company’s ability to pivot from a significant loss to profitability, coupled with robust revenue growth, demonstrates improved efficiency and market demand. The healthy order book and strategic focus on infrastructure and renewable energy position the Group for continued growth. While the overall picture is positive, potential investors should remain aware of certain factors.
Key points to consider:
- The Group’s significant turnaround from a loss-making position to profitability.
- Strong revenue contribution from the Construction and Quarry segments, driven by improved execution and demand.
- Positive contribution from the Green Energy segment with the operationalization of the LSS4 project.
- A substantial outstanding order book, recently bolstered by new contract wins, providing revenue visibility for the next two years.
- The ongoing material litigation involving a subsidiary, Spring Energy Sdn. Bhd., which carries a claim amount of RM 3.97 million and continues to be a pending matter with rescheduled trial dates.
- General geopolitical uncertainties that could impact costs and project timelines.
Final Thoughts and What’s Next?
Advancecon’s Q1 2025 report paints a picture of a company regaining its footing and strategically positioning itself for future growth. The shift from a challenging period to one of profitability is commendable, reflecting disciplined management and a responsive approach to market opportunities. The strong order book and diversification into green energy are certainly positive signs for its long-term trajectory.
Do you believe Advancecon can maintain this impressive growth momentum and further solidify its position in the evolving Malaysian infrastructure and energy landscape? Share your thoughts and insights in the comments section below!
For more in-depth analyses of Malaysian companies and market trends, be sure to check out our other articles on [Link to related article 1] and [Link to related article 2].
