Unpacking the Core Financials: A Stellar Turnaround

Coraza’s Q1 2025 results highlight a remarkable turnaround, moving from a loss-making position to healthy profitability. Let’s look at the key figures compared to the same period last year and the immediate preceding quarter.

Quarterly Performance: Q1 2025 vs. Q1 2024

The numbers speak volumes! Revenue surged by an impressive 81.4% to RM35.84 million, up from RM19.75 million in the corresponding quarter of the previous year. This significant increase was primarily driven by the ongoing recovery in the semiconductor industry. More impressively, the Group swung from a Loss Before Tax of RM1.69 million in Q1 2024 to a Profit Before Tax of RM3.53 million in Q1 2025, marking a 308.5% improvement. This strong PBT translated into a Net Profit of RM2.68 million, a welcome return to profitability from a net loss of RM1.32 million a year ago, leading to a positive basic EPS of 0.54 sen.

Quarter-on-Quarter Momentum: Q1 2025 vs. Q4 2024

Compared to the immediate preceding quarter (Q4 2024), Coraza continued its positive trajectory. Revenue saw a slight increase of 0.5% from RM35.68 million, indicating sustained recovery. Gross Profit jumped by 24.3%, and Profit Before Tax rose by 18.3%, demonstrating improved operational efficiency and margin expansion.

Business Unit and Geographical Contributions

A closer look at the segmental information reveals the drivers behind this growth:

Both core business units saw significant revenue increases, with Fabrication of sheet metal; Frames & Structure growing substantially, reflecting strong demand. Geographically, Malaysia remains the largest contributor, with revenue more than doubling from RM12.10 million in Q1 2024 to RM29.11 million in Q1 2025. While contributions from Singapore and the United States saw slight declines, the strong domestic growth more than compensated, highlighting the importance of the Malaysian market for Coraza.

Financial Health: Balance Sheet & Cash Flow

Coraza’s financial position also appears robust. As at 31 March 2025, Total Assets stood at RM193.05 million, an increase from RM189.40 million at 31 December 2024. Total Equity grew to RM133.45 million from RM130.77 million, boosting Net Assets Per Ordinary Share to RM0.27 (from RM0.25). Cash and cash equivalents also saw a healthy increase, reaching RM48.99 million compared to RM46.23 million at the end of last year. This strong cash position is supported by robust cash flow from operating activities, which improved significantly to RM3.64 million in Q1 2025 from RM1.18 million in Q1 2024.

The company continues to invest in its future, with capital commitments for property, plant and equipment at RM34.41 million, reflecting ongoing expansion plans, including the construction of a new factory which is 53.37% complete as of March 2025 and expected to be operational in Q4 2025.

Navigating Challenges and Charting Future Growth

While Coraza’s performance is commendable, the management remains acutely aware of the broader economic landscape. The global semiconductor industry is on an optimistic footing, with reputable forecasts like the World Semiconductor Trade Statistics (WSTS) projecting sustained growth. This aligns with the positive order outlook communicated by Coraza’s key customers, signaling continued positive momentum.

However, the company acknowledges the persistent macroeconomic and geopolitical uncertainties. Ongoing tensions between major global powers, particularly the US and China, continue to pose risks through potential tariff actions and disruptions to cross-border semiconductor supply chains. For Malaysia’s semiconductor ecosystem, this could mean elevated input costs, extended lead times, and shifts in procurement strategies from multinational clients.

Another significant challenge is foreign exchange (FX) volatility, especially the unpredictable movements of the US Dollar against the Malaysian Ringgit. While Coraza employs natural hedging strategies, the increasing influence of tariff policy shifts and global monetary dynamics makes currency fluctuations harder to predict. The company is actively considering and implementing new mitigation measures to address this.

Despite these headwinds, Coraza’s management remains cautiously optimistic. Their strategy focuses on customer diversification, enhancing operational agility, and disciplined financial stewardship to build resilience against economic shocks. They are vigilant in tracking geopolitical developments, reviewing pricing strategies, and executing targeted FX hedging to protect margins and maintain competitiveness. Looking ahead, the Group anticipates continued growth for the remainder of FY2025, driven by sustained customer demand, improved production efficiencies, and alignment with national strategic priorities for the semiconductor sector.