AYS Ventures Navigates Challenging Waters: A Deep Dive into Q4 FY2025 Results

AYS Ventures Berhad, a prominent player in Malaysia’s steel products and construction materials sector, recently unveiled its unaudited consolidated results for the fourth financial quarter ended 31 March 2025. This report provides a crucial glimpse into the company’s performance amidst a dynamic and often volatile global economic landscape.

While the latest quarter saw a commendable increase in revenue, the full financial year presented significant profitability challenges. However, a closer look reveals the company’s resilience and strategic adjustments in response to market headwinds. Notably, AYS Ventures had previously paid a final single-tier dividend of 1.5 sen per ordinary share for the financial year ended 31 March 2024, demonstrating its commitment to shareholder returns.

Core Data Highlights: A Mixed Bag of Performance

The financial results for AYS Ventures Berhad present a nuanced picture, with revenue growth in the latest quarter contrasting with a decline in profitability over the full financial year. Let’s break down the key figures:

Q4 FY2025 Performance: A Quarterly Comparison

For the fourth quarter ended 31 March 2025, AYS Ventures showed a strong revenue increase compared to the same period last year, primarily driven by its Trading & Services division. However, profitability metrics faced headwinds.

Revenue for Q4 FY2025 grew by RM31.860 million, or 10.85%, compared to the same period last year. Despite this, operating profit decreased by RM4.776 million, or -32.01%, and Profit Before Tax (PBT) saw a significant drop of RM4.283 million, or -46.79%. This decline in profitability was mainly attributed to lower average selling prices and the recognition of impairment losses on receivables and inventories, although it was partially cushioned by a fair value gain on investment properties. Interestingly, Profit Attributable to Ordinary Equity Holders increased by RM1.059 million, or 20.53%, which can be linked to factors like a lower effective tax rate due to overprovision reversal and non-taxable incomes, as detailed in the report.

Full Year FY2025 Performance: A Broader View

Looking at the entire financial year, the challenges impacting profitability became more apparent, leading to a full-year loss.

For the full financial year, revenue saw a modest increase of 2.50% to RM1,321.439 million. However, operating profit plunged by -75.83%, and the company recorded a significant loss before tax and loss attributable to ordinary equity holders, indicating the cumulative effect of the challenging market conditions throughout the year.

Quarter-on-Quarter Snapshot: Q4 FY2025 vs Q3 FY2025

Comparing the latest quarter to the immediate preceding quarter reveals some positive sequential improvements in profitability, despite a dip in revenue.

Revenue decreased by -11.01% compared to the immediate preceding quarter, mainly due to lower sales volumes in both the Trading & Services and Manufacturing divisions. However, operating profit remarkably increased by 53.85%, and PBT saw a substantial improvement, increasing by over 100%. This sequential improvement in profitability was primarily driven by lower cost of sales and operating expenses, coupled with the fair value gain on investment properties, despite the ongoing impairment losses.

Segmental Performance: Diving Deeper

AYS Ventures operates primarily through its Trading & Services and Manufacturing segments. Here’s how each performed:

• Trading & Services: This division saw its Q4 revenue increase by RM33.253 million to RM318.232 million compared to the same period last year, thanks to higher sales volumes. However, its PBT decreased by RM3.146 million to RM3.654 million due to reduced average selling prices and impairment losses. On a quarter-on-quarter basis, while revenue declined due to lower sales volumes, PBT significantly improved from a loss to a profit, driven by better cost management and the fair value gain.
• Manufacturing: This segment experienced a decrease in Q4 revenue by RM0.814 million to RM6.835 million compared to the same period last year. It also recorded a loss before tax (LBT) of RM0.188 million, a decrease of RM0.430 million compared to a profit in the same period last year. This was primarily due to reduced sales volumes, lower average selling prices, and higher production costs. The quarter-on-quarter trend also showed a slight revenue decrease and an increased loss before tax, reflecting similar challenges.
• Others: This segment, comprising investment holding and administrative services, contributed positively to the overall segment results with RM4.579 million for the financial period.

Financial Health Snapshot

The company’s financial position shows prudent management of its borrowings:

Total borrowings decreased by RM73.300 million to RM410.670 million compared to the immediate preceding quarter. This reduction was mainly due to lower inventory holding and higher trade payables, indicating efficient working capital management. The Group’s capital commitments stood at RM4.523 million, comprising RM0.124 million contracted but not provided for, and RM4.399 million approved but not contracted for.

Navigating Headwinds: Risks and Prospects

AYS Ventures acknowledges a challenging operating environment, influenced by both global and domestic factors. The global growth forecast for 2025 has been revised downwards, with surging tariff rates, persistent inflation, and geopolitical tensions creating an unpredictable landscape.

Domestically, Malaysia’s economy grew by 4.4% in the first quarter of 2025, with strong growth in the construction sector. However, the government’s full-year GDP forecast is under review due to global trade risks. Similarly, Singapore, a key regional market, saw its GDP forecast downgraded, reflecting the impact of tariffs and softening global demand.

Against this backdrop, the Board anticipates a challenging year ahead. Key challenges include:

• Lingering effects of Trump-era tariffs
• Persistent steel price volatility
• Elevated energy and interest costs
• Foreign currency exchange rate fluctuations
• Sustained geopolitical tensions
• A highly competitive operating landscape

To address these headwinds, AYS Ventures plans to remain agile and proactive. Their strategy focuses on delivering high-quality, value-added steel solutions aligned with customer needs, while exercising financial prudence and operational efficiency. Efforts will be directed towards optimizing inventory management and sourcing strategies, enhancing cost control and operational productivity, managing external risks through supply chain adaptability, and maintaining long-term resilience through innovative and strategic focus.

In my professional view, AYS Ventures’ Q4 performance, particularly the sequential improvement in profitability despite a revenue dip, indicates a management team actively responding to market pressures. The full-year loss underscores the severity of the operating environment, but the articulated strategies—focusing on operational efficiency, prudent financial management, and supply chain adaptability—are critical steps towards long-term stability and growth.

What are your thoughts on AYS Ventures’ ability to navigate the volatile steel market and maintain its strategic growth? Share your views in the comment section below!

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