Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of Wellcall Holdings Berhad, a prominent player in the industrial rubber hose manufacturing sector. The company has just released its unaudited financial results for the second quarter ended 31 March 2025, and there’s plenty to unpack.
While Wellcall continues to demonstrate its operational resilience and commitment to shareholder returns, the report highlights some key challenges in the current market environment. Specifically, we’ll be looking at how global demand shifts have impacted their top and bottom lines, and what strategies they’re employing to navigate these headwinds. Despite a dip in revenue and profit compared to the same period last year, the company remains profitable and has announced a dividend, a testament to its consistent cash flow generation.
So, let’s peel back the layers of this report and understand the numbers that matter to Malaysian retail investors like us.
Decoding Wellcall’s Latest Financials: A Closer Look at Q2 FY2025
Wellcall’s financial performance for the second quarter of the financial year ending 30 September 2025 reflects the ongoing softness in the industrial rubber hose market. Let’s break down the key figures for the quarter and the cumulative six-month period.
Quarterly Performance (3-Months Ended 31 March 2025 vs 31 March 2024)
The current quarter saw a notable decline in key financial metrics when compared to the corresponding period last year. This was primarily attributed to a continuous slowdown in demand within the low and medium pressure industrial rubber hose industry globally.
Current Quarter (31 Mar 2025)
- Revenue: RM44,067,000
- Profit Before Taxation (PBT): RM11,081,000
- Profit for the Period: RM8,234,000
- Basic Earnings Per Share: 1.65 sen
- Single Tier Dividend Per Share: 1.80 sen
Previous Corresponding Quarter (31 Mar 2024)
- Revenue: RM49,087,000
- Profit Before Taxation (PBT): RM15,323,000
- Profit for the Period: RM11,809,000
- Basic Earnings Per Share: 2.37 sen
- Single Tier Dividend Per Share: 2.00 sen
As you can see, revenue for the current quarter decreased by approximately 10% to RM44.07 million from RM49.09 million. This lower top-line figure directly impacted profitability, with Profit Before Taxation (PBT) falling by about 28%, from RM15.32 million to RM11.08 million. Consequently, the profit for the period attributable to equity holders also saw a decline of around 30%.
Cumulative Performance (6-Months Ended 31 March 2025 vs 31 March 2024)
Looking at the half-year performance, the trend of softening market sentiment continues to be evident, albeit with a slightly less pronounced impact on a percentage basis.
Current Cumulative Period (31 Mar 2025)
- Revenue: RM92,734,000
- Profit Before Taxation (PBT): RM29,185,000
- Profit for the Period: RM21,521,000
- Basic Earnings Per Share: 4.32 sen
- Total Single Tier Dividend Per Share: 3.80 sen
Previous Corresponding Cumulative Period (31 Mar 2024)
- Revenue: RM101,524,000
- Profit Before Taxation (PBT): RM34,112,000
- Profit for the Period: RM25,482,000
- Basic Earnings Per Share: 5.12 sen
- Total Single Tier Dividend Per Share: 4.00 sen
For the six-month period, Wellcall’s revenue decreased by approximately 9% to RM92.73 million, down from RM101.52 million in the previous corresponding period. PBT for the cumulative period also saw a reduction of about 14%, from RM34.11 million to RM29.19 million. The export market remained the primary revenue driver, contributing approximately 91% to the Group’s total revenue, though it also experienced a 9% decrease.
Quarter-on-Quarter Comparison (Q2 FY2025 vs Q1 FY2025)
Comparing the current quarter (Q2 FY2025) with the immediate preceding quarter (Q1 FY2025), we observe a continued deceleration.
| Metric | Current Quarter (31 Mar 2025) | Preceding Quarter (31 Dec 2024) | Change (%) |
|---|---|---|---|
| Revenue | RM44,067,000 | RM48,667,000 | -9% |
| Profit Before Taxation (PBT) | RM11,081,000 | RM18,104,000 | -39% |
The revenue dropped by approximately 9%, primarily due to the ongoing slowdown in demand. The more significant drop in PBT (around 39%) was not only due to lower revenue but also impacted by an unrealized loss arising from foreign exchange translation movements during the quarter.
Financial Health: Balance Sheet and Cash Flow
Despite the challenging operating environment, Wellcall maintains a robust financial position. As at 31 March 2025, total assets stood at RM169.07 million, with total equity at RM143.71 million. This translates to a net asset per share of RM0.289, a slight increase from RM0.287 at 30 September 2024.
The company continues to operate with no group borrowings, highlighting a very healthy balance sheet. Cash and cash equivalents remained strong at RM71.98 million as of 31 March 2025. Net cash generated from operating activities for the six-month period was RM25.70 million, demonstrating the company’s ability to convert its operations into cash, even with reduced revenue.
Navigating Headwinds: Risks and Strategic Outlook
Wellcall’s report acknowledges the challenging market conditions, particularly the continuous softening of market sentiment and lower demand in the industrial rubber hose industry. The company also faced an impact from unrealized foreign exchange translation movements in the recent quarter, which affected profitability.
However, Wellcall is not passively weathering the storm. Their strategy focuses on several key areas:
- Operational Efficiency: The Group recognizes the importance of optimizing operating costs to improve margins.
- Market Competitiveness: Wellcall aims to maintain its strong market positioning by offering competitive pricing, which is crucial in a soft demand environment.
- Volume Growth and Delivery: A focus on securing higher sales volumes and ensuring prompt product delivery remains a priority.
- Customer Engagement: The company is committed to delivering high-quality products to existing customers while proactively seeking new orders.
- Risk Mitigation: They emphasize monitoring prevailing market conditions to adopt appropriate strategies to mitigate risks and achieve sustainable growth.
It’s also worth noting that Wellcall has terminated its joint venture business arrangement with Trelleborg Holding AB by winding up Trelleborg Wellcall Sdn. Bhd. on 31 December 2024. This strategic move could allow the company to streamline operations or reallocate resources to other growth areas.
Summary and Future Outlook
Summary and
Wellcall’s latest quarterly report paints a picture of a company facing significant external pressures, primarily from a global slowdown in demand for industrial rubber hoses and adverse foreign exchange movements. Both quarterly and year-to-date figures show a decline in revenue and profitability compared to the previous year and preceding quarter.
However, the company’s underlying financial health remains robust. It operates with zero borrowings and continues to generate strong cash flow from operations, which is a commendable feat in the current climate. The announcement of a 1.80 sen dividend for the quarter, bringing the total for the year to 3.80 sen, underscores its commitment to shareholder returns, even if slightly lower than the previous year.
Wellcall’s management appears proactive in addressing the challenges, focusing on cost optimization, competitive pricing, and securing new business. The termination of the joint venture also suggests a strategic reassessment of their business portfolio.
Key points to consider moving forward include:
- The persistence of the global slowdown in industrial rubber hose demand.
- The impact of foreign exchange volatility on future earnings.
- The effectiveness of their cost optimization and market competitiveness strategies in driving volume growth.
- The ability to secure new customers and expand market share amidst intense competition.
While the immediate outlook presents challenges, Wellcall’s strong balance sheet and clear strategic initiatives suggest a company determined to navigate these headwinds and maintain its market prominence. Investors will be keen to see if these strategies translate into improved performance in the coming quarters.
What are your thoughts?
Wellcall Holdings Berhad is clearly in a challenging period, but their financial discipline and strategic focus are evident. Do you think the company can regain its growth momentum in the coming financial years? What are your expectations for the industrial rubber hose market globally?
Share your insights and perspectives in the comments section below. Let’s discuss how Wellcall might continue to adapt and thrive in this evolving landscape.
