Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of SEDANIA INNOVATOR BERHAD (SIB) for its Third Quarter ended 31 March 2025. This report paints a compelling picture of resilience and strategic execution, highlighting a significant rebound in revenue and a commendable shift from losses to operational profits. While the journey isn’t without its complexities, SIB’s latest figures offer plenty to ponder for Malaysian retail investors.

So, what’s the headline? SIB has delivered impressive revenue growth, showing a remarkable 53% increase this quarter compared to the same period last year, and successfully turned its operational losses into a profit. Let’s unpack the numbers and see what’s driving this momentum and what lies ahead for the company.

Core Data Highlights: A Quarter of Significant Improvement

SIB’s Q3 FY2025 results demonstrate a robust financial recovery. The Group’s revenue surged, and crucially, it returned to profitability at the operational level. Here’s a quick glance at the key figures compared to the same quarter last year:

This turnaround is particularly noteworthy, indicating improved efficiency and stronger sales across its business segments. Let’s look at the detailed comparison:

While the quarterly performance shows a strong recovery, the cumulative nine-month period (Year-To-Date) still reflects some challenges, with the loss attributable to equity holders widening to RM0.91 million from RM0.55 million in the previous year, primarily due to higher tax provisions and one-off items. However, the overall trend in operating performance is clearly positive.

Segmental Performance: The Engines of Growth

SIB’s business is diversified across three main segments, each contributing to the Group’s overall performance:

Sustainable FMCG (Fast-Moving Consumer Goods)

This segment continues to be a primary driver of SIB’s revenue growth. Revenue for this quarter grew by 46% and 51% for the nine-month period, reflecting strong sales momentum from both online and international channels. Brands like Offspring, Tanamera, and FA Herbs are gaining traction.

However, despite the revenue growth, operating profit for the segment saw a slight decline this quarter (RM72k vs RM92k) and for the nine-month period (RM2.01 million vs RM2.33 million). This was attributed to increased marketing and staff costs, aimed at strengthening brand positioning and expanding market reach. It’s a strategic investment for future growth.

Here’s a breakdown of the Sustainable FMCG revenue by geographic location:

Sustainable Consumer Technology

This segment, encompassing innovative digital solutions for banking and financial services (Fintech) and airtime sharing technology (Telcotech), also showed positive trends. Revenue increased by 37% this quarter, driven by continued demand for digital financial solutions and successful project deliveries. Fintech revenue specifically grew by 48%.

Operating profit for the quarter improved significantly to RM996k from RM621k in the same period last year. However, the nine-month operating profit saw a slight decline (RM1.89 million vs RM2.42 million), mainly due to higher payroll expenses, expanded sales and marketing activities, and increased administrative costs to support business growth.

Sustainable Energy

The Sustainable Energy segment demonstrated the most dramatic turnaround. Its revenue more than tripled this quarter and nearly tripled on a nine-month basis. This surge was primarily due to progress in project deployment and billings, including a significant one-off project tender completed with a strategic partner during the period.

Crucially, this segment turned profitable at the operating level this quarter, recording RM3k compared to a loss of RM2.52 million in the prior year. While still in an investment phase, the nine-month loss significantly narrowed to RM972k from RM3.55 million, indicating substantial improvement and potential for future profitability.

Others

This segment, primarily comprising investment holding operations, recorded an operating loss of RM0.71 million this quarter, widening from RM0.51 million in the same period last year. This reflects the centralised operating costs incurred on behalf of the Group.

Financial Health: A Stable Foundation

As of 31 March 2025, SIB’s total assets stood at RM79.10 million, an increase from RM73.69 million at 30 June 2024. Total liabilities also increased to RM27.39 million from RM21.80 million, largely due to an increase in current liabilities, particularly bank borrowings. Net assets per share saw a slight decrease to 14.15 sen from 14.61 sen at 30 June 2024.

The Group’s cash and bank balances were RM4.93 million at quarter-end, a decrease from RM7.75 million at 30 June 2024, reflecting operational cash outflows and investments. Total borrowings increased to RM16.29 million from RM13.03 million in the same period last year, primarily due to increased term loans and trade finance products.

Strategic Outlook and Future Prospects

Looking ahead, SIB remains committed to sustaining its growth momentum across all three core business segments. The strategy involves a combination of market expansion, operational improvements, and strategic execution.

• Sustainable FMCG: The focus is on strengthening its position in key international markets by leveraging its growing brand presence (Offspring, Tanamera, FA Herbs). This includes optimising product mix, improving cost efficiency, and enhancing channel performance to support long-term profitability.
• Sustainable Consumer Technology: SIB aims to deepen engagement with Islamic financial institutions and continue innovating in Shariah-compliant digital solutions to broaden adoption and reinforce its market leadership.
• Sustainable Energy: The priority is delivering secured contracts and actively exploring new project opportunities and partnerships to build scale and improve the cost structure, building on the significant progress seen this quarter.

The company also announced key corporate proposals: a private placement of up to 20% of its shares to third-party investors and the acquisition of an additional 29% equity interest in Offspring Inc Sdn Bhd for RM17.40 million cash. These proposals are subject to regulatory and shareholder approvals and are expected to strengthen SIB’s market position and financial flexibility.

In a positive development, the material litigation involving Offspring Inc Sdn Bhd has been concluded with an out-of-court settlement. The company has confirmed that this resolution will have no financial or operational impact on Offspring, as Sedania Corporation Sdn Bhd will indemnify Offspring and SIB against any related claims. This removes a potential overhang for the company.

It is important to note that no dividends were paid, declared, or proposed during the quarter under review.