ANNUM BERHAD: A Deep Dive into Q1 2025 Performance Amidst Key Challenges
Greetings, fellow Malaysian retail investors! Today, we’re dissecting the latest quarterly report from ANNUM BERHAD for the first quarter ended 31 March 2025. This report offers a mixed bag of operational achievements and significant corporate challenges, making it a crucial read for anyone following the company.
While the company has demonstrated impressive revenue growth in the quarter, the picture becomes more nuanced when we look at profitability and, more critically, the recent developments regarding its regulatory standing. It’s important to note upfront that due to a change in the financial year-end from 30 June 2024 to 31 December 2024, there is no direct comparative financial information available for the preceding year’s corresponding quarter (Q1 2024). Therefore, our analysis will primarily focus on the performance against the immediate preceding quarter (Q4 2024) and the company’s financial health as of March 31, 2025.
Q1 2025: Revenue Soars, But Profit Takes a Hit (with context!)
ANNUM BERHAD kicked off the 2025 financial year with a robust top-line performance, but its bottom line saw a notable decline. Let’s break down the numbers:
Current Quarter (Q1 2025)
Revenue: RM86.93 million
Profit Before Tax (PBT): RM5.43 million
Profit After Tax (PAT): RM4.16 million
Earnings Per Share (EPS): 1.83 sen
Immediate Preceding Quarter (Q4 2024)
Revenue: RM20.52 million
Profit Before Tax (PBT): RM15.64 million
Profit After Tax (PAT): RM15.64 million
Earnings Per Share (EPS): 6.87 sen
Revenue Growth Explained: The Group’s revenue surged by an impressive 323.66%, or RM66.41 million, to reach RM86.93 million in Q1 2025 compared to RM20.52 million in Q4 2024. This significant increase was primarily driven by higher sales in the agricultural business, benefiting from festive seasons, and the completion of several construction jobs during the quarter. The agricultural segment contributed a dominant 83% of the total revenue, with construction making up the remaining 17%.
Profit Decline: A Closer Look: While revenue showed strong momentum, Profit Before Tax (PBT) for Q1 2025 decreased by 65.28% to RM5.43 million from RM15.64 million in the immediate preceding quarter. Similarly, Profit After Tax (PAT) and Earnings Per Share (EPS) also saw declines. It’s crucial to understand the context here: the immediate preceding quarter (Q4 2024) included a substantial one-off gain of RM20.9 million from the disposal of property, plant, and equipment. Excluding this exceptional item, the operational profit trend would appear more favourable, indicating that the core businesses are generating positive results.
Financial Health Snapshot (As at 31 March 2025)
The company’s balance sheet reflects some shifts from the end of 2024:
| Financial Metric | 31 March 2025 (RM’000) | 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 115,558 | 91,680 |
| Total Equity | 95,080 | 90,917 |
| Net Assets Per Share (RM) | 0.42 | 0.40 |
| Trade Receivables | 84,666 | 26,855 |
| Cash and Bank Balances | 6,145 | 6,084 |
Total assets and equity saw an increase, contributing to a slightly improved Net Assets Per Share. A significant increase in trade receivables from RM26.86 million to RM84.67 million indicates a higher volume of sales on credit, which will be important to monitor for collection efficiency. Cash and bank balances remained relatively stable, with net cash generated from operating activities at RM71,000 for the quarter.
Risks and Future Prospects: A Dual Narrative
ANNUM BERHAD’s prospects are a tale of two halves: steady operational growth alongside pressing regulatory challenges.
Operational Outlook: Building on Momentum
The Group’s management remains optimistic about its core businesses. The agricultural segment is expected to continue its steady growth, a sector that has historically benefited from festive seasons. On the construction front, the management is actively seeking new projects, including renovations, demolition works, and road works, and engaging with potential customers. The Board believes that these business strategies will gradually strengthen the Group’s financial position and enhance shareholder value in the mid to long term.
Critical Challenges: The Regulatory Hurdle
Despite the operational positives, the company faces an immediate and significant challenge regarding its regulatory status. The most critical event is the rejection of its application for an extension of time (EOT) by Bursa Malaysia Securities Berhad to submit its regularisation plan. This led to an announcement that trading in ANNUM’s securities would be suspended from May 28, 2025, and potentially de-listed on May 30, 2025.
However, ANNUM BERHAD has submitted an appeal against the de-listing procedures. This appeal defers the de-listing pending Bursa Securities’ decision, which is expected to be announced in due course. The outcome of this appeal is paramount for the company’s future on the exchange.
Furthermore, it’s worth noting that the audited financial statements for the financial period ended 31 December 2024 received a “qualified with disclaimer of opinion” from the auditors. This indicates significant concerns regarding the financial statements and warrants close attention from investors.
Summary and Outlook
ANNUM BERHAD’s Q1 2025 results present a complex picture. The company has demonstrated impressive revenue growth, driven by its agricultural and construction segments, which is a positive sign for its core operations. While profitability declined compared to the immediate preceding quarter, this was largely due to a one-off gain recorded in Q4 2024, suggesting that underlying operational performance is more stable than the headline profit figures might imply.
However, the operational positives are overshadowed by significant corporate and regulatory concerns. The most pressing issues include:
- The ongoing appeal against Bursa Securities’ rejection of the extension of time for its regularisation plan, which could lead to a de-listing.
- The “qualified with disclaimer of opinion” in its latest audited financial statements, raising questions about financial transparency and reliability.
The Board’s commitment to exploring new opportunities in construction and maintaining steady agricultural growth provides a glimmer of long-term potential. Yet, the immediate future hinges heavily on the resolution of its regulatory challenges. Investors will be keenly awaiting the outcome of the appeal to Bursa Securities, as it will determine the company’s continued presence on the exchange.
What are your thoughts on ANNUM BERHAD’s Q1 2025 performance and the significant regulatory hurdles it faces? Do you believe the company can navigate these challenges and sustain its operational momentum?
Share your views in the comments section below!
