Axteria Group Berhad: A Closer Look at Q1 2025 Performance – Revenue Soars, But Profit Margins Face Headwinds
Greetings, fellow investors! Today, we’re diving into the latest financial report from Axteria Group Berhad for the first quarter ended 31 March 2025. This report offers a mixed bag of results, showcasing impressive revenue growth driven by key development projects, yet revealing a dip in pre-tax profit due to specific operational expenses. Let’s unpack the numbers and understand what this means for the company’s trajectory.
Unpacking the Numbers: A Tale of Growth and Operational Adjustments
Axteria Group Berhad has delivered a robust top-line performance for Q1 2025, signaling strong market activity in its core businesses. However, a closer look at the bottom line reveals areas requiring attention.
Q1 2025 Financial Snapshot:
- Revenue: A significant increase to RM14.17 million, up 61.0% from the previous year’s corresponding quarter.
- Profit Before Taxation (PBT): Recorded at RM0.19 million, a decrease from RM0.27 million in the same period last year.
- Profit After Taxation: Stood at RM0.15 million, compared to RM0.18 million a year ago.
- Basic Earnings Per Share (EPS): Remained stable at 0.02 sen.
Year-on-Year Performance: Revenue Surge Meets Profit Headwinds
The substantial 61.0% jump in revenue from RM8.80 million in Q1 2024 to RM14.17 million in Q1 2025 is a testament to the Group’s active development and sales efforts. This growth was primarily fueled by:
* New sales recognition from **Project Sentrio** and **The Asteria Melaka** serviced apartments.
* Continued progressive billings from previously sold units within **A SOHO Johor Jaya** and **The Asteria Melaka**.
* Revenue generated from the sale of a parcel of vacant land under **Project Desa 88**.
Despite this impressive top-line expansion, the Group’s Profit Before Taxation (PBT) saw a decline. The report attributes this decrease mainly to increased operating expenses, specifically those related to the issuance and transfers of strata titles for The Asteria Melaka project. This suggests that while sales are strong, the costs associated with project completion and legal documentation have impacted short-term profitability.
Q1 2025 (Current Quarter)
Revenue: RM14,173,000
Profit Before Taxation: RM186,000
Profit After Taxation: RM146,000
Basic EPS (sen): 0.02
Q1 2024 (Preceding Year Corresponding Quarter)
Revenue: RM8,803,000
Profit Before Taxation: RM268,000
Profit After Taxation: RM177,000
Basic EPS (sen): 0.02
Quarter-on-Quarter Turnaround: Bouncing Back from Previous Losses
Comparing the current quarter to the preceding quarter (Q4 2024) reveals a significant positive shift. Axteria Group Berhad recorded a revenue of RM14.17 million in Q1 2025, representing a 30.87% increase from RM10.83 million in Q4 2024. More importantly, the Group posted a PBT of RM0.19 million, a notable turnaround from the loss before taxation of RM9.79 million reported in the preceding quarter. This dramatic improvement was largely due to the absence of one-off impairment expenses, specifically the full impairment of goodwill recognized in Q4 2024, which had materially impacted the Group’s bottom line previously. This indicates a recovery in underlying operational profitability.
Q1 2025 (Current Quarter)
Revenue: RM14,173,000
Profit Before Taxation: RM186,000
Q4 2024 (Preceding Quarter)
Revenue: RM10,830,000
Profit Before Taxation: (RM9,790,000)
Segmental Performance: Property Development Leads the Charge
The Group’s performance is predominantly driven by its Property Development & Construction segment, which generated all of the external revenue for the quarter.
| Segment (3-month ended 31 March 2025) | Revenue (RM’000) | Profit/(Loss) for the period (RM’000) |
|---|---|---|
| Property development & construction | 14,173 | 344 |
| Investment holding | – | (195) |
| Trading | – | (3) |
| Total | 14,173 | 146 |
This breakdown clearly shows that the property development and construction arm is the primary engine of the Group’s earnings, while the Investment Holding segment continues to record a loss, partially offsetting the gains from property.
Financial Health Check: Balance Sheet and Cash Flow
As of 31 March 2025, Axteria Group’s total assets stood at RM187.31 million, a slight decrease from RM193.35 million at the end of 2024. Total equity saw a marginal increase to RM146.33 million from RM146.18 million, while net assets per share slightly dipped from RM0.20 to RM0.19. Cash and bank balances decreased to RM6.08 million from RM7.23 million at the end of 2024.
From a cash flow perspective, the Group reported negative net cash from operating activities of RM(1.65) million for the quarter, though this is an improvement compared to the RM(13.13) million for the full year 2024. This indicates that while operations are consuming cash, the rate has slowed. Investing activities resulted in a net cash outflow of RM(0.01) million, primarily due to property, plant, and equipment purchases. Financing activities provided a net cash inflow of RM0.52 million, largely from new term loan drawdowns offsetting repayments.
Looking Ahead: Strategic Focus on Project Monetization
Axteria Group remains optimistic about its growth trajectory, driven by the strategic advancement and monetization of its key development projects. The Group’s forward-looking strategy is centered on capitalizing on progress and realizing value from its portfolio.
Key Developments and Outlook:
* **Project Desa 88:** Continues to demonstrate success, with remaining build-to-suit industrial lands offering further monetization opportunities.
* **Project Sentrio:** Boasts a strong sales/reservation rate of 80%, positioning it well for continued revenue contribution as the Group moves towards full inventory monetization.
* **The Asteria Melaka:** This flagship project is nearing a significant milestone, with both the serviced apartment tower and hotel block on track to obtain their Certificate of Completion and Compliance (CCC) in Q2 2025. This project is expected to be a major contributor to the Group’s revenue going forward.
* **A SOHO Johor Jaya:** Continues to enjoy robust market demand, with all international SOHO units fully sold or booked. The remaining Bumiputra units and retail shop lots present further sales potential, and construction progress remains on schedule.
Forward-Looking Strategy:
The Group’s strategic focus is aligned with principles of:
* Operational Excellence: Refining processes and project management for enhanced efficiency.
* Innovation and Market Agility: Staying attuned to market dynamics to meet evolving demands.
* Proactive Asset Management: Optimizing the value of existing assets.
* Financial Discipline: Maintaining prudent financial management for sustainability.
While the increased operating expenses in Q1 2025 highlight potential cost pressures, the Group’s proactive strategies and strong project pipeline aim to mitigate these. The upcoming CCC for The Asteria Melaka is a critical milestone that could significantly boost future revenue recognition.
Summary and Outlook
Axteria Group Berhad’s Q1 2025 report paints a picture of a company actively pushing its development projects forward, resulting in substantial revenue growth. The impressive quarter-on-quarter turnaround from a significant loss in Q4 2024 to a profit in Q1 2025 is a positive indicator of the Group’s ability to recover from one-off impacts and improve its underlying operational performance.
However, the slight dip in year-on-year profit before taxation, attributed to increased operating expenses for strata title transfers, suggests that while the top-line is expanding, managing costs associated with project completion will be crucial. The Group’s strategic focus on monetizing its existing assets and bringing key projects like The Asteria Melaka and A SOHO Johor Jaya to completion provides a clear pathway for future revenue and potentially improved profitability.
The company did not declare any dividends for the current financial period.
Key points to monitor going forward:
- The successful obtainment of CCC for The Asteria Melaka in Q2 2025 and its subsequent revenue contribution.
- Continued sales momentum and construction progress for A SOHO Johor Jaya and Project Sentrio.
- The Group’s ability to manage operating expenses and improve profit margins as projects move towards completion.
- Cash flow from operations and overall financial health.
What are your thoughts?
Axteria Group Berhad is clearly in a phase of active development and monetization. While the Q1 2025 results show strong revenue growth and a positive turnaround from the previous quarter’s loss, the year-on-year PBT decline due to specific operational costs is a point to observe.
Do you think Axteria Group can maintain this growth momentum and translate it into sustained profitability in the coming quarters? Share your insights and perspectives in the comments section below!
