Hiap Huat Holdings Berhad: Riding the Green Wave with Strong Q1 Revenue Growth
Greetings, fellow investors! Today, we’re diving into the latest financial performance of Hiap Huat Holdings Berhad, a name that’s becoming increasingly relevant in Malaysia’s evolving industrial landscape. The company has just released its unaudited condensed consolidated financial statements for the first quarter ended 31 March 2025, and there are some compelling insights to unpack.
This report paints a picture of robust revenue expansion, largely propelled by their strategic pivot towards sustainable products. While the top-line growth is certainly impressive, reaching nearly an 80% increase compared to the same period last year, we also need to examine the nuances within their profitability margins and cash flow. Let’s break down the key figures and strategic moves that define Hiap Huat’s current trajectory.
Q1 FY2025 Performance: A Tale of Growth and Strategic Shifts
Hiap Huat Holdings Berhad delivered a strong top-line performance in the first quarter of financial year 2025 (Q1 FY2025), showcasing significant growth in revenue. This surge was primarily driven by their expanding sustainable products segment, which is clearly becoming a cornerstone of the company’s future.
Q1 FY2025 Highlights
Revenue: RM38.06 million
Profit Before Tax (PBT): RM1.18 million
Net Profit Attributable to Equity Holders: RM0.55 million
Earnings Per Share (EPS): 0.14 sen
EBITDA: RM3.79 million
Compared to Q1 FY2024
Revenue: RM21.18 million
Profit Before Tax (PBT): RM0.61 million
Net Profit Attributable to Equity Holders: RM0.42 million
Earnings Per Share (EPS): 0.11 sen
EBITDA: RM3.31 million
As you can see, revenue soared by an impressive 79.72% from RM21.18 million in Q1 FY2024 to RM38.06 million in Q1 FY2025. This significant growth translated into a 97.09% increase in Profit Before Tax (PBT), rising from RM0.61 million to RM1.18 million. Similarly, earnings per share (EPS) saw a healthy jump from 0.11 sen to 0.14 sen.
Driving Force: Sustainable Products Segment
The stellar revenue growth was largely fueled by the sustainable products segment. Its contribution to total revenue dramatically increased from 32.28% in Q1 FY2024 to a commanding 63.74% in Q1 FY2025. This highlights Hiap Huat’s successful diversification strategy and its ability to tap into growing market demand for environmentally friendly solutions.
A Closer Look: Q1 FY2025 vs. Q4 FY2024
While the year-on-year comparison is strong, it’s also insightful to look at the quarter-on-quarter performance against the immediate preceding quarter (Q4 FY2024). This provides a more immediate snapshot of recent trends.
| Financial Quarter Ended | 31 March 2025 (RM’000) | 31 December 2024 (RM’000) | Change (RM’000) | Change (%) |
|---|---|---|---|---|
| Revenue | 38,057 | 62,693 | (24,636) | -39.30% |
| Profit before taxation | 1,176 | 1,797 | (621) | -34.56% |
| EBITDA | 3,788 | 4,056 | (268) | -6.61% |
Compared to Q4 FY2024, revenue saw a 39.30% decrease, primarily due to a significant reduction in the contribution from the recycled petroleum products segment, which dropped from 45.53% to 9.24% of total revenue. Despite lower revenue, the gross profit margin actually improved from 6.88% in Q4 FY2024 to 14.12% in Q1 FY2025. This improvement was attributed to a higher sales contribution from sustainable products and effective material cost reductions.
However, other income decreased due to lower foreign exchange gains, and total operating expenses, particularly administrative costs, saw an increase. Finance costs also rose due to interest charges on loan reimbursements and new hire purchases. These factors collectively led to a lower PBT of RM1.18 million in Q1 FY2025 compared to RM1.80 million in Q4 FY2024.
Financial Health and Cash Flow
Looking at the balance sheet, Hiap Huat’s total assets grew to RM363.86 million as of 31 March 2025, up from RM352.30 million at the end of 2024. Total equity also saw a slight increase to RM105.22 million. Net assets per share remained stable at RM0.27.
However, the cash flow statement reveals some shifts. Net cash generated from operating activities significantly decreased to RM0.23 million in Q1 FY2025, compared to RM10.17 million in Q1 FY2024. While cash used in investing activities reduced, the overall cash and cash equivalents at the end of the period stood at RM10.69 million, down from RM13.53 million at the beginning of the year. This indicates a tighter cash position compared to the previous year, which is something to monitor. It’s also worth noting that the Group’s effective tax rate for the quarter was higher than the statutory rate, mainly due to non-deductible expenses and losses incurred by some subsidiaries.
No dividends were declared or recommended for the current financial period under review.
Risks and Future Prospects: Navigating a Dynamic Landscape
Hiap Huat acknowledges the mixed economic climate anticipated for 2025, citing global deceleration and persistent domestic inflationary pressures. The volatility of the Ringgit is also a key concern, as it could impact operational costs and supply chains. Within their traditional industry, oil price volatility is expected to continue influencing demand and pricing.
Despite these headwinds, the Group is strategically positioning itself for future growth. A significant driver is the continued expansion into the biofuel products segment. This move is not just about diversification; it represents a strong commitment to sustainable solutions and aims to capitalize on the increasing global demand for renewable energy sources. The company is optimistic about the substantial growth opportunities this segment presents.
For their established oil product manufacturing segment, the focus remains firmly on enhancing operational efficiency and rigorous cost management to maintain competitiveness and
