Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial waters of Ocean Fresh Berhad, a key player in Malaysia’s frozen seafood industry, as they release their interim financial report for the first quarter ended 31 March 2025. While the numbers for this quarter show a mixed performance compared to the same period last year, the company appears to be charting a course for future growth through strategic initiatives. Let’s unpack the key highlights and what they mean for the company’s journey ahead.

Q1 2025 Performance: A Tale of Two Comparisons

Ocean Fresh Berhad’s first quarter performance presents an interesting picture. While revenue and profit experienced a significant decline compared to the same quarter last year, there’s a notable rebound when looking at the immediate preceding quarter. This indicates a potential recovery in operational momentum.

Year-on-Year Snapshot (Q1 2025 vs. Q1 2024)

The first quarter of 2025 saw a substantial drop in key financial metrics when compared to the robust performance of Q1 2024. This decline was primarily driven by a decrease in gross profit and an inventory write-down.

Revenue for the quarter decreased by 24.52% to RM41.86 million from RM55.46 million in the same period last year. This directly impacted profitability, with Profit Before Tax (PBT) plummeting by 85.08% to RM0.37 million. The report attributes this significant PBT decline mainly to a RM2.21 million decrease in gross profit and a notable RM0.74 million in inventory write-downs recorded under other expenses.

Quarter-on-Quarter Improvement (Q1 2025 vs. Q4 2024)

Despite the year-on-year decline, the company demonstrated a strong recovery compared to the immediate preceding quarter (Q4 2024), turning a loss into a profit.

Revenue surged by 35.96%, from RM30.79 million in the preceding quarter to RM41.86 million. This increase was largely driven by a significant RM15.98 million increase in revenue from the processing and trading of frozen seafood products, particularly molluscs. More impressively, the company swung from a loss before tax of RM0.16 million in Q4 2024 to a profit before tax of RM0.37 million in Q1 2025. This turnaround was supported by a RM1.21 million increase in gross profit, lower selling and distribution expenses, and a net impairment gain on financial assets.

Business Segment Performance

The processing and trading of frozen seafood products remain the core revenue driver. For Q1 2025, molluscs contributed the lion’s share at RM32.10 million (76.69% of total revenue), followed by fishes at RM8.78 million (20.97%), and other frozen seafood products at RM0.45 million (1.07%). The provision of frozen seafood processing services contributed RM0.53 million.

Financial Health and Cash Flow

Looking at the balance sheet as of 31 March 2025, total assets slightly decreased to RM77.69 million from RM80.24 million at the end of 2024. Total equity also saw a slight dip to RM59.46 million from RM60.17 million, resulting in a net asset per share of RM0.28. A notable change in current assets was a decrease in inventories, while cash and bank balances saw an increase, suggesting some improvement in working capital management.

From a cash flow perspective, net cash from operating activities significantly reduced to RM1.02 million in Q1 2025 compared to RM6.95 million in Q1 2024. However, the company managed to generate positive net cash from investing activities (RM0.05 million) compared to a cash outflow in the prior year, indicating more efficient capital deployment or asset disposals. Net cash used in financing activities also decreased, showing a reduced reliance on external funding or more efficient debt management.

Strategic Outlook and Future Prospects

Ocean Fresh Berhad has clearly articulated several strategic plans aimed at driving future growth, even as it navigates current market conditions.

• Expansion of Cold Storage Facilities: A crucial move to address existing capacity issues, the company plans to construct a new cold storage facility with a 3,000-tonne capacity. Encouragingly, the Pahang State Forestry Department has conditionally approved a 30-year extension for the use permit of the land. The building plan was submitted in mid-May 2025, marking progress on this vital project.
• Growth in Frozen Seafood Exports: Leveraging its existing GACC certificate, the Group aims to expand its frozen seafood exports, with a particular focus on the lucrative Chinese market and other high-consumption regions in Asia Pacific.
• Venturing into Dried Seafood Products: Recognizing the benefits of lower storage and transportation costs, the company initially planned to diversify into dried seafood. However, the report indicates a delay in operations for this segment due to “uncertainty and instability of the current dried seafood products market in China.” This highlights a cautious approach in volatile market segments.

IPO Proceeds Utilization: A Closer Look

The utilization of IPO proceeds is a key indicator of strategic execution. While working capital and listing expenses have been fully utilized, the capital expenditure for the new cold storage facility shows a very low utilization rate of 1.11% (RM89,000 out of RM8,000,000 proposed). This suggests that while plans are in motion, the actual construction and investment into this critical infrastructure are still in very early stages.

Shareholder Returns: A Glimmer of Dividend

Despite the challenging quarter, the Board of Directors declared an interim single-tier dividend of 0.5 sen (RM0.005) per ordinary share, amounting to RM1,050,730.00 for the financial year ending 31 December 2025. The entitlement date was 21 March 2025, with payment on 8 April 2025. This demonstrates the company’s commitment to returning value to its shareholders.