Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial disclosures from Lianson Fleet Group Berhad (LFG), a key player in the Malaysian oil and gas maritime services sector. Their first-quarter report for the period ended 31 March 2025 has just dropped, and it paints a compelling picture of significant turnaround and strategic expansion.
After navigating a challenging period, LFG has not only returned to profitability but also announced a promising interim dividend, signaling a robust start to the year. This report highlights the Group’s resilience and strategic initiatives, setting a positive tone for the remainder of 2025. Let’s unpack the numbers and understand the driving forces behind this performance.
Core Financial Highlights: A Remarkable Turnaround
LFG’s first quarter of 2025 demonstrates a significant shift in its financial trajectory, moving from a substantial loss to a healthy profit. This improvement is primarily attributed to enhanced operational efficiencies, stronger charter rates, and strategic cost management.
Quarter-on-Quarter Performance (Q1 2025 vs Q1 2024)
Current Quarter (Q1 2025)
Revenue: RM 57,251,277
Profit Before Taxation: RM 11,960,031
Profit for the Quarter: RM 10,290,089
Profit Attributable to Equity Holders: RM 11,365,687
Basic Earnings Per Share: 1.53 sen
Diluted Earnings Per Share: 1.49 sen
Corresponding Quarter (Q1 2024)
Revenue: RM 30,542,807
Loss Before Taxation: RM (26,514,855)
Loss for the Quarter: RM (25,644,567)
Loss Attributable to Equity Holders: RM (23,601,210)
Basic Earnings Per Share: (4.36) sen
Diluted Earnings Per Share: (4.36) sen
The Group’s revenue surged by an impressive 87% to RM 57.3 million in Q1 2025, up from RM 30.5 million in the same period last year. This significant growth was primarily driven by stronger average daily charter rates and a modest improvement in vessel utilisation, which rose to 51% from 50%.
More remarkably, LFG transitioned from a substantial loss after tax of RM 25.6 million in Q1 2024 to a profit after taxation of RM 10.3 million in the current quarter. This turnaround reflects not only higher vessel charter revenues but also reduced administrative and financing costs, coupled with the absence of the prior year’s RM 13.1 million in costs related to replacement vessel chartering and receivable impairment charges.
Sequential Quarter Performance (Q1 2025 vs Q4 2024)
| Metric | Q1 2025 (RM) | Q4 2024 (RM) |
|---|---|---|
| Revenue | 57,251,277 | 77,847,157 |
| Profit After Tax | 10,290,089 | 26,751,716 |
While the year-on-year comparison is highly positive, revenue for Q1 2025 saw a decrease of 26% from the preceding quarter (Q4 2024), falling from RM 77.8 million to RM 57.3 million. This quarter-on-quarter decline was primarily due to a drop in fleet utilisation from 83% to 51%. The report attributes this to typical monsoon conditions impacting offshore operations and several vessels undergoing planned dry-docking and maintenance, which directly reduced hire income despite unchanged average daily charter rates.
Financial Health: A Snapshot of the Balance Sheet and Cash Flow
As at 31 March 2025, LFG’s financial position shows a robust increase in assets and equity, reflecting recent strategic moves.
- Property, Plant and Equipment: Increased to RM 610.6 million (from RM 491.7 million at 31 Dec 2024), indicating significant asset base expansion.
- Goodwill: A new entry of RM 94.8 million, arising from the acquisition of subsidiaries.
- Cash and Bank Balances: Total cash and bank balances stood at RM 123.9 million (RM 42.8 million non-current and RM 81.1 million current), a healthy increase from RM 91.6 million at 31 Dec 2024.
- Total Equity: Grew substantially to RM 683.0 million (from RM 456.5 million at 31 Dec 2024), driven by increased share capital from acquisitions and retained earnings.
From a cash flow perspective, the Group generated a strong RM 35.6 million from operating activities in Q1 2025, a significant improvement from RM 1.4 million in Q1 2024. This highlights efficient operations. Net cash from investing activities was RM 4.7 million, while net cash used in financing activities reduced substantially to RM 8.4 million from RM 50.3 million in the prior year, partly due to no dividend payments in the current quarter.
Strategic Growth and Future Outlook
LFG’s management is optimistic about the future, citing the positive Q1 FY2025 performance as a strong foundation for the year. The Group’s adaptability has allowed it to seize opportunities within Malaysia’s oil and gas market, despite ongoing uncertainties in the energy sector.
Order Book and Stability
As of 31 March 2025, LFG’s Offshore Support Vessel (OSV) segment boasts an impressive order book of RM 320.8 million. Crucially, 80% of this order book is secured under long-term contracts, providing essential revenue stability in the inherently cyclical oil and gas industry. This stability, combined with focused cost optimisation, has translated into positive operational performance.
Strategic Acquisitions and Expansion
A key highlight of the quarter was the completion of strategic acquisitions. On 31 January 2025, LFG acquired 70% of Regulus Offshore Sdn Bhd and 100% of Yinson Camellia Sdn Bhd. These acquisitions, funded by new share issuances, are expected to enhance the Group’s financial performance. Furthermore, subsequent to the quarter end on 16 May 2025, LFG completed the acquisition of Icon Bahtera (B) Sdn Bhd and Icon Waja (L) Inc., further expanding its asset base and future earnings potential across Southeast Asia. The Group also incorporated Nusantara Maritime Sdn Bhd (NMSB) on 28 April 2025, a joint venture poised to engage in ship owning, vessel operations, and other maritime services.
Navigating Challenges
LFG acknowledges global challenges such as evolving trade policies, variable oil-price trends, and macroeconomic instability. To counter these, the Group continues to uphold stringent cost controls and employ a flexible chartering strategy, allowing them to reposition vessels into markets offering the best rates and utilisation. This proactive approach underscores their confidence in navigating market dynamics and delivering positive results for the remainder of 2025.
Dividend Announcement
In a positive development for shareholders, LFG declared a first interim dividend of 1.0 sen per ordinary share for the financial year ending 31 December 2025. This dividend, totaling approximately RM 8.55 million, will be paid on 14 August 2025 to entitled shareholders as of 31 July 2025.
Summary and Investment Considerations
Lianson Fleet Group Berhad has delivered a compelling first-quarter performance for 2025, marked by a significant return to profitability and robust revenue growth compared to the previous year. The strategic acquisitions completed during and after the quarter are set to bolster the Group’s asset base and enhance its earnings potential, particularly in the Southeast Asian market. The substantial order book, largely secured by long-term contracts, provides a strong foundation for revenue stability. While the quarter-on-quarter decline in revenue and profit is noted, it is attributed to seasonal factors and planned maintenance, which are typical in the industry.
The Group’s proactive management of operational costs and flexible chartering strategies position it well to navigate the inherent volatilities of the oil and gas sector. The declared interim dividend further underscores the management’s confidence and commitment to shareholder returns.
Key points to consider from this report include:
- Significant year-on-year turnaround from loss to profitability, driven by higher charter rates and cost management.
- Strategic acquisitions that have expanded the asset base and are expected to contribute positively to future earnings.
- A strong, long-term secured order book providing revenue stability.
- A proactive approach to global market challenges through cost controls and flexible strategies.
- Declaration of an interim dividend, reflecting confidence in future performance.
From an objective standpoint, LFG’s Q1 2025 report showcases a company that is not only recovering but actively expanding and optimizing its operations. The strategic acquisitions and the formation of new joint ventures suggest a clear growth trajectory, while the strong order book provides a degree of insulation from market fluctuations. The return to profitability and the dividend declaration are strong indicators of improved financial health and management’s commitment to delivering value.
Do you think Lianson Fleet Group Berhad can maintain this impressive growth momentum throughout the rest of 2025, especially given the ongoing global economic uncertainties and the cyclical nature of the oil and gas industry? Share your thoughts and insights in the comments section below!
