Financial Performance Overview: A Quarter of Strategic Adjustments

The first quarter of 2025 saw Suria Capital Holdings Berhad record a total revenue of RM46.1 million and a profit before tax of RM15.5 million. These figures represent a notable decrease compared to the previous year’s corresponding quarter, primarily influenced by a significant strategic shift in its port operations. However, it’s important to look beyond the immediate figures to understand the underlying strategic intent.

Key Financial Highlights (Q1 2025 vs. Q1 2024):

The decline in revenue from operations by 33% and a 22% drop in profit before tax are largely attributed to the formal transfer of management control of Sapangar Bay Container Port (SBCP) to DP World Sabah Sdn. Bhd. on 9 September 2024. This strategic collaboration, while impacting immediate revenue recognition, is poised for substantial long-term benefits.

Interestingly, when comparing the current quarter’s profit before tax of RM15.5 million to the immediate preceding quarter (Q4 2024), which reported a loss before tax of RM12.7 million, the Group has seen a remarkable turnaround, increasing by over 100% from a loss to a profit position.

Deep Dive into Business Segments

Suria Capital’s diversified business units each tell a unique story this quarter:

• Port Operations: This segment remains the principal revenue contributor, accounting for 84% of the Group’s total revenue and 71% of its profit before tax for the quarter. However, cargo throughput declined by 32% and container cargo (TEUs) by a significant 72%. This contraction is a direct consequence of the SBCP management transfer. Despite this, port operations continue to be crucial for Sabah’s economy, supporting imports and exports.
• Property Development and Leasing: Contributing 1% to the Group’s revenue, this segment saw positive developments. The leasing occupancy rate for the Gallery Shoppes stands at a healthy 90.2%. Notably, the company disposed of 0.37 acres of land held for development for RM1.5 million, resulting in a gain of RM879,386.
• Ferry Terminal Operations: This segment showed strong growth, contributing 4% of the Group’s revenue (up from 2% last year). The increase is primarily due to higher domestic and international tourist arrivals in Sabah, boosting income from berthing fees, retail outlets, and other ancillary services.
• Logistics and Bunkering Services: This segment’s contribution to Group revenue increased to 2% (from less than 1% last year), indicating positive growth and its continued support for the port business.
• Investment Holding: This segment also turned profitable, reporting a profit before tax of RM557,000 compared to a loss in the same period last year.
• Contract and Engineering: While still in a loss-making position, the segment’s losses narrowed compared to the previous year.

Financial Health and Cash Flow Dynamics

Examining the balance sheet, Suria Capital’s total assets saw a slight decrease to RM1,405.2 million as of 31 March 2025, from RM1,415.3 million at the end of 2024. However, total liabilities decreased more significantly, leading to an increase in net assets to RM1,152.7 million from RM1,140.7 million, indicating an improvement in overall financial health.

Cash flow presented an interesting picture. While operating activities resulted in a net cash outflow of RM42.2 million (compared to an inflow of RM7.2 million last year), investing activities swung significantly into positive territory, generating a net cash inflow of RM52.4 million. This was largely driven by a decrease in cash at banks and deposits pledged, as well as proceeds from the disposal of investment securities and land, reflecting strategic asset management.

Strategic Outlook and Future Prospects

Suria Capital is clearly playing a long game, focusing on strategic initiatives that promise substantial returns down the line. The collaboration with DP World Sabah Sdn. Bhd. for Sapangar Bay Container Port is a cornerstone of this strategy. While it has an immediate impact on revenue, the partnership is envisioned to transform SBCP into a regional maritime and logistics hub, integrating it into DP World’s global network. This is expected to significantly enhance operational efficiency, competitiveness, and strategic relevance in regional and international trade, with substantial long-term value accretion for the Group.

The property development segment also holds significant promise. The commencement of the second phase of the Joint Venture with SBC Corporation Berhad in December 2024, coupled with the recent Joint Development Agreements (JDAs) for the Jesselton Docklands projects, underscores the Group’s commitment to unlocking value from its strategic landbank in Kota Kinabalu. The Jesselton Docklands projects, envisioned as a vibrant waterfront transformation, will feature residential and commercial suites, retail spaces, a luxury hotel, an integrated cruise terminal, and other amenities, with the Jesselton Docklands 2 project slated to commence in 2026 and developed in phases over 15 years.

These initiatives align with Suria Capital’s overarching commitment to achieving long-term sustainable growth, diversifying its revenue streams, and creating enhanced value for all its stakeholders.