HIL INDUSTRIES BERHAD Navigates a Challenging Quarter: A Deep Dive into Q1 2025 Performance
Greetings, fellow investors and market enthusiasts! Today, we’re taking a closer look at HIL INDUSTRIES BERHAD’s unaudited financial results for the first quarter ended 31 March 2025. As a prominent Malaysian public limited company listed on Bursa Malaysia, HIL INDUSTRIES BERHAD’s performance offers valuable insights into the broader economic landscape and specific sector trends. This latest report reveals a quarter marked by both challenges and strategic repositioning, prompting us to examine the underlying factors and the company’s forward-looking plans.
The core takeaway? HIL INDUSTRIES BERHAD experienced a notable decline in both revenue and profit for Q1 2025 compared to the same period last year. However, the company is actively implementing strategies across its key business segments to adapt to market dynamics and lay the groundwork for future growth.
Core Data Highlights: A Mixed Performance Picture
Let’s dive into the numbers to understand the full scope of HIL INDUSTRIES BERHAD’s performance in the first quarter of 2025. The overall financial figures indicate a challenging period, with key metrics showing a significant decrease when compared to the first quarter of the previous year.
Overall Financial Performance
For the three months ended 31 March 2025, HIL INDUSTRIES BERHAD reported a revenue of RM45.931 million, a decline of RM17.147 million or 27.18% from the RM63.078 million recorded in the corresponding period last year. This dip in top-line performance naturally flowed down to the profitability:
Revenue
RM45,931k
Current Period (31.3.2025)
Revenue (Previous Year)
RM63,078k
Previous Period (31.3.2024)
Profit Before Taxation
RM8,848k
Current Period (31.3.2025)
Profit Before Taxation (Previous Year)
RM15,669k
Previous Period (31.3.2024)
Profit After Taxation
RM5,846k
Current Period (31.3.2025)
Profit After Taxation (Previous Year)
RM10,888k
Previous Period (31.3.2024)
Basic Earnings Per Share
1.69 sen
Current Period (31.3.2025)
Basic Earnings Per Share (Previous Year)
3.15 sen
Previous Period (31.3.2024)
The profit before taxation saw a significant decrease of RM6.821 million, or 43.53%, reflecting the impact of reduced revenue and, notably, a one-time tax charge amounting to RM1.994 million due to additional tax assessments by the Inland Revenue Board (IRB).
Segmental Breakdown: Understanding the Drivers
HIL INDUSTRIES BERHAD operates across several key segments, and understanding their individual performance is crucial:
Manufacturing Division
The manufacturing segment, a core component of the Group’s business, experienced a decrease in revenue by RM1.754 million (4.29%) and a drop in results by RM2.273 million (24.19%). This was primarily attributed to a slight decline in demand from the automotive division and fewer production days due to planned festive season shutdowns by major customers. The Malaysian Automotive Association (MAA) also projects a slight decrease in the total industry volume (TIV) for 2025, from 816,747 units in 2024 to 780,000 units in 2025, reflecting a cautious outlook for the sector.
Property Development and Management Division
This segment faced the most significant headwinds, registering a substantial decrease in revenue of RM15.356 million (69.34%) and a decline in results of RM4.178 million (77.33%). The primary reason cited for this sharp decline was the absence of new project launches during the quarter under review.
Trading, Services and Others Segment
In contrast to the other segments, the trading, services, and others segment showed resilience and growth. It recorded an increase in revenue of RM0.189 million (78.42%) and, more impressively, a reduction in losses by RM0.029 million (69.05%). This positive performance was driven by a favorable product mix, particularly prescribed drugs and supplements, which carry higher margins.
Financial Health: Balance Sheet and Cash Flow
Looking at the balance sheet, HIL INDUSTRIES BERHAD’s total assets increased to RM616.949 million as at 31 March 2025, up from RM604.741 million at the end of December 2024. Total equity also saw a modest increase to RM486.828 million from RM480.877 million, leading to an increase in net assets per share to RM1.45 from RM1.43. This indicates a healthy growth in the company’s asset base and shareholder equity.
However, the cash flow statement shows a shift in operating activities, moving from a positive net cash flow of RM5.064 million in the first quarter of 2024 to a net cash used in operating activities of RM2.483 million in the current quarter. This change primarily reflects movements in working capital, particularly a significant increase in inventories.
Risk and Prospect Analysis: Navigating the Future
HIL INDUSTRIES BERHAD acknowledges the challenging operating environment but maintains an optimistic outlook for the financial year 2025, contingent on global stability. The company’s strategies are clearly laid out to mitigate risks and capitalize on opportunities across its divisions:
Manufacturing Division Outlook
Despite the current dip, the manufacturing division anticipates a rebound, driven by the launch of several new automotive models and an expansion of its product range supplied to existing customers by the fourth quarter of 2025. To enhance efficiency and manage increased orders, the company has invested in new machinery, automated production lines, and increased training for human capital development. Furthermore, HIL INDUSTRIES BERHAD is committed to upgrading its production systems and exploring advanced digitalization, including Artificial Intelligence, to boost operational efficiencies. The company also continues to actively seek new customers and expand business from existing ones.
Property Division Outlook
For the property division, the strategy involves a measured approach to project launches. The company plans to launch its other projects in Carey Island and recent acquisitions in the near future. The focus remains on expanding its property business, particularly in the affordable housing segment within the Klang Valley region. HIL INDUSTRIES BERHAD is actively looking for new development land in the Klang Valley, with a preference for joint-venture arrangements with landowners over outright purchases.
Overall Market Environment
The Group recognizes potential external risks, including global trade uncertainties stemming from recently announced US tariffs affecting countries worldwide, and ongoing geopolitical conflicts in Ukraine and the Middle East, which could lead to a global recession. Despite these external factors, the company believes its proactive strategies will enable it to perform well.
Summary and
HIL INDUSTRIES BERHAD’s first quarter of 2025 presents a mixed financial picture. While the company recorded a significant decline in revenue and profit before tax, largely due to a slowdown in its property division (absence of new launches) and a slight dip in manufacturing demand, its overall financial health remains robust, as evidenced by growth in total assets and equity. The positive performance of the trading and services segment offers a silver lining, showcasing the benefits of a diversified business portfolio.
Looking ahead, HIL INDUSTRIES BERHAD has articulated clear strategic initiatives for both its manufacturing and property segments. Investments in automation, digitalisation, and human capital aim to bolster manufacturing efficiency and capacity. In property, a pipeline of future launches and a focus on affordable housing in high-demand areas, coupled with a preference for joint ventures, suggest a cautious yet growth-oriented approach. The company’s awareness of broader macroeconomic and geopolitical risks underscores a realistic assessment of the operating environment.
Key points to consider moving forward:
- The timing and success of new property project launches will be critical for the Property Development & Management segment’s recovery.
- The ability of the manufacturing division to secure new customers and leverage its automation investments will be key to offsetting automotive market fluctuations.
- The impact of global trade uncertainties and geopolitical conflicts on overall demand and supply chains remains a significant external factor.
- The company’s continued focus on cost control and operational efficiencies, particularly in manufacturing, will be vital for margin preservation.
This report highlights a company in a phase of strategic adjustment, aiming to build resilience and future growth amidst a challenging backdrop. The upcoming quarters will reveal the effectiveness of these measures.
Concluding Thoughts
HIL INDUSTRIES BERHAD’s Q1 2025 results underscore the dynamic nature of the business environment. While the headline figures indicate a slowdown, a deeper dive reveals a company actively taking steps to innovate, expand, and manage risks. Their focus on automation, digitalization, strategic land banking, and market diversification speaks volumes about their long-term vision.
What are your thoughts on HIL INDUSTRIES BERHAD’s strategy to navigate these challenging times? Do you believe their investments in manufacturing and planned property launches will yield positive results in the coming quarters? Share your insights in the comments section below!
