Cuscapi Berhad’s Q1 2025: A Look at the Numbers and What’s Ahead
Hello fellow Malaysian retail investors! Today, we’re diving into Cuscapi Berhad’s unaudited interim financial report for the first quarter ended 31 March 2025. This report offers a crucial snapshot of the company’s financial health and strategic direction. While some numbers might raise an eyebrow, Cuscapi is clearly laying the groundwork for future growth through innovation and diversification. Let’s break down the key takeaways and understand what they mean for this technology-driven solutions provider.
Core Financial Highlights: A Mixed Bag
Cuscapi Berhad’s Q1 2025 performance presents a nuanced picture. While revenue saw a slight dip, the profit before tax experienced a more significant decline when compared to the same period last year. However, a closer look at the immediate preceding quarter reveals a positive turnaround in profitability.
Revenue Performance: A Slight Contraction
For the quarter ended 31 March 2025, Cuscapi reported a revenue of RM 7.32 million. This marks a marginal 1% decrease compared to RM 7.37 million in the corresponding quarter last year. The company attributes this slight contraction primarily to lower revenue generated from software and related sales.
Q1 2025 Revenue
RM 7,317,483
Q1 2024 Revenue
RM 7,372,679
Profitability: Facing Headwinds but Showing Recovery
The most notable change this quarter is in profitability. Profit before taxation for Q1 2025 stood at RM 1.43 million, a significant 65% drop from RM 4.09 million recorded in Q1 2024. This decline was mainly driven by:
- A substantial decrease in gross profit, primarily due to higher amortisation of intangible assets.
- A reduction in other operating income, largely because the preceding year’s quarter benefited from a reversal of bad debts written off.
- However, a positive offset came from decreased operating expenses, mainly due to lower staff costs.
Q1 2025 Profit Before Tax
RM 1,433,348
Q1 2024 Profit Before Tax
RM 4,089,896
Interestingly, when compared to the immediate preceding quarter (Q4 2024), Cuscapi demonstrated a strong rebound. The company turned a loss before taxation of RM 0.13 million in Q4 2024 into a profit of RM 1.43 million in Q1 2025, marking an impressive 1,172% increase. This recovery was largely due to higher gross margin from software sales and lower operating expenses, despite a decrease in other operating income due to a revaluation gain on investment property in the prior quarter.
Earnings Per Share
Consequently, basic profit per share for the quarter decreased to 0.14 sen from 0.42 sen in Q1 2024.
Q1 2025 Basic EPS
0.14 sen
Q1 2024 Basic EPS
0.42 sen
Financial Health: Balance Sheet and Cash Flow
As of 31 March 2025, Cuscapi’s total assets saw a slight increase to RM 72.74 million from RM 71.83 million at the end of 2024. Total equity also improved to RM 54.62 million from RM 53.30 million, leading to a marginal increase in net assets per share to RM 0.058.
A closer look at the cash flow statement reveals a significant shift. Net cash generated from operating activities for Q1 2025 was a mere RM 32,184, a drastic decrease from RM 10.07 million in Q1 2024. While the company ended the quarter with a higher cash and cash equivalents balance of RM 2.80 million (compared to RM 1.44 million in Q1 2024), the sharp decline in operating cash flow warrants close attention.
No dividends were paid during the current financial quarter under review.
Strategic Outlook and Potential Challenges
Cuscapi remains optimistic about its future, focusing on driving organic growth through innovation and diversification. The company is actively leveraging cutting-edge technologies such as Artificial Intelligence (AI), blockchain, and the Internet of Things (IoT) to meet evolving customer demands across both domestic and international markets.
The Group is expanding its product suite in the retail POS space, offering next-generation systems designed to enhance operational efficiency, improve customer experiences, and support digital transformation. This includes value-added modules like e-Invoicing for regulatory compliance, Kitchen Display Systems (KDS), Inventory Management, and QR Ordering. Furthermore, Cuscapi is introducing Loyalty programs, CRM tools, Self-service Kiosks, and mobile ordering solutions to streamline services and reduce labor dependency, alongside advanced Reporting and Analytics tools for data-driven decision-making.
Cuscapi continues to scale the deployment of its flagship platforms—Transight, C360 Engage, and GENPACX—in POS and Automotive solutions, aiming to address industry challenges like rising costs and labor shortages through automation and smart workflow design. The Board expresses confidence in the company’s ability to sustain its growth trajectory through innovation, product expansion, strategic partnerships, and sectoral growth.
However, the company is also facing an ongoing legal challenge. A material litigation case involving an appeal at the Court of Appeal has been allowed, with the suit now directed to be heard before a different High Court Judge. This indicates a continued legal process that could potentially impact the company.
Summary and
Cuscapi Berhad’s Q1 2025 report highlights a period of significant strategic focus and operational adjustments. While the year-on-year profit before tax saw a considerable decline, the company demonstrated a strong sequential recovery from the immediate preceding quarter’s loss. This suggests that internal adjustments and strategic initiatives might be starting to bear fruit. The company’s continued commitment to innovation and expansion into the broader retail ecosystem, alongside its efforts to integrate advanced technologies, positions it for potential long-term growth.
However, it’s important for investors to consider the following key points:
- Profitability Pressure: The significant year-on-year drop in profit before tax, largely due to higher amortisation and changes in other operating income, indicates ongoing pressure on margins.
- Operating Cash Flow: The drastic reduction in net cash generated from operating activities is a crucial indicator that warrants careful monitoring, as it reflects the company’s ability to generate cash from its core operations.
- Ongoing Litigation: The material litigation case, which has been directed to be heard before a new High Court Judge, presents an unresolved legal risk that could have future implications.
Cuscapi’s strategic pivot towards advanced solutions and diversified offerings in the retail sector appears promising, but the financial metrics suggest that these initiatives are still in their early stages of impacting the bottom line positively on a year-on-year basis. The rebound from the previous quarter’s loss is a positive sign, but the long-term sustainability of this recovery and the impact of the identified risks will be key factors to watch.
What are your thoughts on Cuscapi’s Q1 2025 performance? Do you believe their focus on AI, IoT, and expanding retail solutions will drive significant growth in the coming quarters? Share your views in the comments section below!
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