Malaysian retail investors, ever wondered how a venerable company like Harrisons Holdings (Malaysia) Berhad navigates the ever-shifting economic tides? Their latest unaudited condensed consolidated financial report for the first quarter ended 31 March 2025 has just landed, offering a fresh glimpse into their performance. While the report reveals a stable top-line revenue, it also points to some interesting shifts in profitability and cash flow, inviting a closer look at the underlying dynamics. Let’s dive in to uncover the key takeaways from this quarter’s performance.
Core Data Highlights: A Closer Look at Q1 2025
Financial Performance Overview
Harrisons Holdings managed to maintain its revenue base, reporting RM 624,498 thousand for the first quarter of 2025, a slight increase from RM 621,151 thousand in the corresponding quarter last year. This indicates a consistent sales volume amidst potentially challenging market conditions. However, a deeper look reveals some pressure on the bottom line.
Q1 2025 Revenue
RM 624,498k
Q1 2024 Revenue
RM 621,151k
Despite the stable revenue, the company’s profitability saw a notable decline. Profit before taxation (PBT) for Q1 2025 stood at RM 17,872 thousand, a decrease of 8.82% compared to RM 19,601 thousand in the corresponding quarter last year. This reduction in PBT translated into a lower net profit for the period, which fell by 9.5% to RM 13,483 thousand from RM 14,897 thousand in the same period last year.
Q1 2025 Profit Before Tax
RM 17,872k
Q1 2024 Profit Before Tax
RM 19,601k
A key factor contributing to this dip in profitability appears to be an increase in administrative expenses, which rose to RM 41,572 thousand in Q1 2025 from RM 39,293 thousand in Q1 2024, an increase of 5.8%. Additionally, finance costs increased by 17.07% to RM 2,373 thousand. Consequently, earnings per share (EPS) for the quarter also saw a decline, dropping to 3.91 sen from 4.37 sen in the corresponding quarter last year.
Financial Health (Balance Sheet)
Turning our attention to the balance sheet as of 31 March 2025, Harrisons Holdings demonstrates a robust financial position. Total assets slightly increased to RM 1,015,861 thousand from RM 974,727 thousand at the end of 2024. The company’s net current assets remain healthy at RM 373,355 thousand, up from RM 359,496 thousand as of 31 December 2024, indicating strong liquidity.
Shareholders’ equity attributable to owners of the company grew to RM 471,893 thousand from RM 458,256 thousand at the end of the last financial year, reflecting a solid foundation. This positive movement is also reflected in the net assets per share, which improved to RM 1.38 as of 31 March 2025, from RM 1.34 at 31 December 2024.
| Balance Sheet Item | As at 31 March 2025 (RM’000) | As at 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 1,015,861 | 974,727 |
| Net Current Assets | 373,355 | 359,496 |
| Equity Attributable to Owners | 471,893 | 458,256 |
| Net Assets Per Share (RM) | 1.38 | 1.34 |
Cash Flow Insights
The cash flow statement presents a mixed picture. Net cash generated from operating activities saw a significant reduction, dropping to RM 621 thousand in Q1 2025 from a more robust RM 8,234 thousand in the corresponding quarter last year. This substantial decline is primarily attributed to changes in working capital, particularly a notable increase in trade and other receivables (RM 64,294 thousand outflow) and a reduction in inventories (RM 33,279 thousand inflow), which offset some of the operational cash generation.
Q1 2025 Net Cash from Operating Activities
RM 621k
Q1 2024 Net Cash from Operating Activities
RM 8,234k
However, the company’s investing activities saw less cash outflow, with net cash used in investing activities at RM 5,955 thousand compared to RM 34,169 thousand in the previous corresponding period. This was partly due to lower purchases of property, plant and equipment, and a higher proceeds from sale of financial assets at FVTPL. Financing activities provided a strong boost, with net cash from financing activities increasing to RM 15,491 thousand from RM 8,953 thousand, mainly driven by higher net drawdowns of bankers’ acceptances and revolving credit.
Overall, despite the lower operating cash flow, the company ended the quarter with a healthy cash and cash equivalents balance of RM 127,461 thousand, an improvement from RM 123,644 thousand in the prior year’s corresponding period.
Risk and Prospect Analysis
While Harrisons Holdings managed to maintain its revenue, the decline in profitability and operating cash flow for the first quarter of 2025 highlights areas that warrant attention. The increase in administrative expenses suggests potential cost pressures or strategic investments that are yet to yield full returns. The rise in finance costs could be a reflection of higher interest rates or increased borrowings to support operations or expansion.
The significant outflow from working capital, particularly the increase in trade receivables, indicates that the company might be extending more credit to its customers, or facing slower collection cycles. This could tie up capital and impact liquidity if not managed effectively. However, the company’s strong balance sheet, with healthy net current assets and growing equity, provides a buffer against these challenges.
Looking ahead, the prospects for Harrisons Holdings will likely hinge on its ability to manage these cost pressures and optimize its working capital. Maintaining revenue growth while improving operational efficiency and cash conversion will be crucial. The company’s strategic focus on managing its financial assets (as seen in the investing cash flows) and its access to financing (as seen in financing cash flows) suggest active financial management aimed at navigating the current economic landscape.
Summary and Outlook
Harrisons Holdings (Malaysia) Berhad’s Q1 2025 report paints a picture of a company with resilient revenue, but facing headwinds in profitability and operational cash flow. While the top-line remained stable, increased administrative and finance costs led to a dip in net profit and earnings per share. The balance sheet, however, continues to show strength with healthy liquidity and growing shareholder equity.
Key points from the report:
- Revenue Stability: The company successfully maintained its revenue base, demonstrating resilience in sales despite market conditions.
- Profitability Pressure: Profit before tax and net profit experienced a decline, primarily due to higher administrative expenses and finance costs.
- Working Capital Challenges: A significant increase in trade receivables impacted operating cash flow, highlighting the need for efficient working capital management.
- Robust Financial Position: A strong balance sheet with healthy net current assets and growing equity provides a solid foundation.
- Improved Cash & Equivalents: Despite lower operating cash flow, the company ended the quarter with a higher cash balance, supported by financing activities.
Moving forward, the company’s focus will likely be on enhancing cost efficiencies and optimizing its working capital cycle to translate its stable revenue into stronger profitability and cash generation. Its robust financial health provides a strong base for navigating future market dynamics.
From a professional standpoint, this report indicates that Harrisons Holdings is at a pivotal point. While its core business appears to be holding steady in terms of sales, the efficiency of converting those sales into profits and operating cash is under pressure. This isn’t uncommon in dynamic markets, and the company’s strong balance sheet suggests it has the capacity to address these operational challenges.
What are your thoughts on Harrisons Holdings’ performance this quarter? Do you believe the company can effectively manage its costs and improve its working capital to boost profitability in the upcoming periods? Share your insights in the comments below!
