Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial report from BERTAM ALLIANCE BERHAD, a familiar name in Malaysia’s property development and construction sectors. This report offers a glimpse into their performance for the first quarter ended 31 March 2025, revealing a mixed bag of results that underscore both the challenges and strategic pivots the company is undertaking.
While the headline figures show a decline in overall profit compared to the same period last year, a deeper look reveals some interesting shifts within their business segments and a clear focus on strengthening their core operations. Let’s unpack the numbers and see what BERTAM ALLIANCE BERHAD has been up to.
Q1 2025 Financial Performance: A Closer Look
BERTAM ALLIANCE BERHAD’s first quarter of 2025 saw a notable decrease in revenue and profit before tax when compared to the corresponding period last year. This was primarily driven by the construction segment, which faced a reduction in project activity.
Q1 2025
Revenue: RM5.58 million
Profit Before Tax: RM0.22 million
Profit After Tax: RM0.22 million
Basic Earnings Per Share: 0.05 Sen
Q1 2024
Revenue: RM9.54 million
Profit Before Tax: RM0.74 million
Profit After Tax: RM0.74 million
Basic Earnings Per Share: 0.23 Sen
Revenue for the quarter decreased by approximately 41% to RM5.58 million from RM9.54 million in the same period last year. This was mainly due to a decrease in contribution from the Hotel Block project. Consequently, profit before tax saw a significant decline of about 71%, settling at RM0.22 million compared to RM0.74 million in Q1 2024. This reduction in profit was also impacted by the absence of a substantial RM1.3 million reversal of impairment of receivables that was recorded in the prior year’s corresponding period.
Basic Earnings Per Share also reflected this downturn, dropping from 0.23 Sen to 0.05 Sen. It’s worth noting that the weighted average number of shares in issue increased significantly from 322.5 million to 483.8 million, which naturally impacts the per-share metrics.
Segmental Performance: A Deeper Dive
BERTAM ALLIANCE BERHAD operates primarily through its Property Development and Construction segments, alongside Corporate and Other services. Here’s how each performed:
Property Development Segment
This segment did not record any revenue for both periods. However, it turned a profit before tax of RM0.20 million in Q1 2025, a significant turnaround from a loss of RM0.05 million in Q1 2024. This improvement indicates positive internal adjustments or reduced overheads within the segment.
Construction Segment
The construction segment remains the sole revenue generator for the Group. Revenue fell by 41% to RM5.58 million, down from RM9.54 million in the corresponding quarter last year. This decline was largely attributed to a decrease in activity from the Hotel Block project. On a positive note, a new project, the Sandakan Commercial Project, contributed RM1.4 million in revenue during the current quarter.
Profit from this segment also decreased by 72% to RM0.35 million from RM1.24 million, primarily due to the absence of the RM1.3 million reversal of impairment of receivables that boosted profits in Q1 2024.
Corporate and Others Segment
This segment recorded a loss of RM0.33 million, an improvement from the RM0.45 million loss in the same period last year, indicating better cost management within corporate functions.
Financial Health Check: Balance Sheet and Cash Flow
As of 31 March 2025, BERTAM ALLIANCE BERHAD’s financial position shows some shifts:
- Total Assets increased slightly to RM182.36 million from RM179.69 million at the end of December 2024.
- Total Equity saw a marginal increase to RM151.35 million from RM151.13 million.
- Net Assets Per Share, however, decreased to RM0.31 from RM0.47 at 31 December 2024. This is largely due to the increase in the number of shares in issue following the private placements in 2024.
- Cash and Cash Equivalents ended the quarter at a negative RM7.45 million, a further decrease from a negative RM3.07 million at the start of the year. This is influenced by an increase in fixed deposits with licensed banks and an increase in bank overdrafts.
- Loans and Borrowings increased to RM9.51 million, mainly due to an increase in bank overdrafts.
From a cash flow perspective, the Group utilized RM1.87 million in operating activities, which is an improvement compared to RM4.57 million used in the same period last year. However, financing activities saw a cash outflow of RM2.50 million, primarily due to an increase in fixed deposits with licensed banks and the absence of share issuance proceeds that were present in Q1 2024.
Risks and Prospects: Navigating the Market
The Board of Directors acknowledges that the property market outlook is expected to remain challenging throughout the year. Factors such as increasing interest rates and the weakening of purchasing power due to inflation are key concerns. In response, BERTAM ALLIANCE BERHAD plans to continue monitoring the property market with an eye towards revitalizing its property development segment. This includes actively seeking appropriate joint venture partners with relevant experience and sufficient financial resources, particularly in Sabah.
The Group’s primary focus for the next two years will be on its construction segment, which is anticipated to be the main income driver. They are actively tendering to secure more construction contracts. As of 31 March 2025, the outstanding order book stands at approximately RM45.3 million, with one new project commenced during the quarter.
It’s also positive to see the progress in the utilization of proceeds from the private placement. Out of RM17.68 million raised in 2024, RM13.42 million has been utilized as of 31 March 2025, primarily for funding construction contracts and working capital, with a balance of RM4.25 million unutilized, well within the intended timeframe.
Dividends
The Board of Directors did not recommend any payment of dividend for the financial period under review.
Summary and
BERTAM ALLIANCE BERHAD’s Q1 2025 report highlights a company in a transitional phase. While overall revenue and profit saw a decline compared to the previous year, the underlying reasons point to a strategic shift towards the construction segment and a cautious approach to property development amidst a challenging market. The positive turnaround in the property development segment’s profitability, despite no revenue, is a good sign of internal efficiency improvements. The healthy outstanding order book in construction provides a solid foundation for future revenue, aligning with the company’s stated focus for the next two years.
However, the negative cash and cash equivalents, coupled with increased borrowings, warrant attention, although the increase in fixed deposits suggests a reallocation of funds rather than just cash burn. The effective utilization of private placement proceeds is a positive indicator of prudent financial management.
Key points to monitor moving forward:
- The success of securing new construction contracts to bolster revenue.
- Progress in identifying and securing joint venture partners for property development, especially in Sabah.
- The Group’s ability to manage its working capital and improve its cash flow position.
- The broader economic environment, particularly interest rates and inflation, and their impact on purchasing power in the property market.
In my professional view, BERTAM ALLIANCE BERHAD is actively adapting to the current market landscape by doubling down on its construction capabilities while strategically assessing opportunities in property development. The immediate quarter’s results reflect this transition, but the forward-looking statements and order book suggest a clearer path ahead for revenue generation.
What are your thoughts on BERTAM ALLIANCE BERHAD’s latest performance? Do you think their focus on the construction segment will be enough to drive significant growth in the coming quarters? Share your insights in the comments below!
