SUMISAUJANA GROUP BERHAD: A Deep Dive into Q1 2025 Performance and Future Prospects
Greetings, fellow investors! Today, we’re unboxing the latest financial report from SUMISAUJANA GROUP BERHAD (SSGB), a notable player in Malaysia’s oil and gas specialty chemicals sector. This report, covering the first quarter ended 31 March 2025, offers our first glimpse into the company’s performance post-acquisition of Sumisaujana TCM Chemicals Sdn Bhd (SSTCM) and just before its recent listing on the ACE Market of Bursa Malaysia. While the numbers show robust revenue growth, a closer look reveals the impact of external factors and strategic shifts that are shaping SSGB’s journey. Let’s break it down!
Key Takeaways from Q1 2025:
- Strong revenue surge, driven by international sales.
- Gross Profit (GP) margin improvement.
- Profit Before Taxation (PBT) affected by foreign exchange fluctuations.
- Strategic diversification into palm-based chemicals post-quarter end.
- Successful listing on the ACE Market on 9 April 2025.
Financial Performance Overview: Q1 2025 vs. Immediate-Corresponding Quarter (Q4 2024)
SSGB has reported its first quarter results for the period ended 31 March 2025. As this is the first interim financial report, there are no comparative figures for the same period last year. Therefore, our analysis will focus on the quarter-on-quarter comparison with the immediate preceding quarter, Q4 2024, to gauge recent trends.
Q1 2025 (Current Quarter)
Revenue: RM37,769,000
Gross Profit (GP): RM11,500,000
Profit Before Taxation (PBT): RM3,352,000
GP Margin: 30.4%
PBT Margin: 8.9%
Profit After Taxation (PAT): RM2,715,000
Basic Earnings Per Share (EPS): 0.24 sen
Q4 2024 (Immediate-Corresponding Quarter)
Revenue: RM27,904,000
Gross Profit (GP): RM7,766,000
Profit Before Taxation (PBT): RM6,137,000
GP Margin: 27.8%
PBT Margin: 22.0%
(PAT and EPS for Q4 2024 not directly provided in Q1 2025 comparison table)
Analysis of Performance:
SSGB’s revenue for Q1 2025 soared to RM37.8 million, marking a significant 35.4% increase from the RM27.9 million recorded in the immediate preceding quarter (Q4 2024). This impressive growth was primarily fueled by higher sales to Thailand and Indonesia, which saw increases of approximately RM4.1 million and RM4.2 million respectively. These two countries alone contributed 41.8% and 18.5% to the Group’s total revenue in Q1 2025.
The Group’s Gross Profit (GP) also saw a healthy rise to RM11.5 million in Q1 2025, up from RM7.8 million in Q4 2024. This resulted in an improved GP margin of 30.4%, compared to 27.8% in the previous quarter, indicating better cost management or more favorable product mix.
However, the Profit Before Taxation (PBT) in Q1 2025 stood at RM3.4 million, a notable decrease from RM6.1 million in Q4 2024. Consequently, the PBT margin dropped from 22.0% to 8.9%. The report attributes this decline primarily to foreign exchange fluctuations. While Q4 2024 benefited from a favourable net gain of RM4.5 million from foreign exchange, Q1 2025 recorded a net loss of RM0.6 million. This swing of over RM5 million significantly impacted the bottom line.
Geographical Revenue Breakdown (Q1 2025):
SSGB’s global footprint is evident in its revenue distribution. Here’s how it breaks down:
| Geographical Segment | Revenue (RM ‘000) | Contribution to Total Revenue |
|---|---|---|
| Thailand | 15,840 | 41.8% |
| Indonesia | 6,952 | 18.5% |
| South Korea | 3,541 | 9.4% |
| Malaysia | 3,131 | 8.3% |
| United States of America | 2,245 | 5.9% |
| Others (e.g., China, Egypt, India, Kuwait, New Zealand, Nigeria, Papua New Guinea, Saudi Arabia, Singapore, UAE) | 6,060 | 16.1% |
| Total | 37,769 | 100.0% |
This diverse revenue base showcases SSGB’s broad market reach, which can help mitigate risks associated with over-reliance on a single market.
Financial Health and Recent Corporate Developments
As at 31 March 2025, SSGB’s total assets stood at RM141.3 million, with total equity at RM90.7 million. The net assets per share were RM0.08. The company’s total borrowings were RM23.7 million (RM14.0 million current, RM9.6 million non-current), with a significant portion in Ringgit Malaysia (RM19.2 million) and United States Dollar (RM4.5 million). The Group’s cash and cash equivalents at the end of the period were RM33.4 million, with net cash from operating activities at RM6.1 million, indicating healthy operational cash generation.
A significant corporate event during this period was the completion of the acquisition of SSTCM on 7 February 2025, which was fully satisfied by the issuance of 1,133,600,000 new ordinary shares. This acquisition is a key part of SSGB’s pre-IPO restructuring. Furthermore, the company successfully listed on the ACE Market of Bursa Securities on 9 April 2025, raising RM74.4 million from its Public Issue. These proceeds are earmarked for strategic investments, including the acquisition of new properties in Puncak Alam for warehouse, corporate office, and factory expansion, as well as capital expenditure and expansion of the research & development division.
Navigating the Future: Prospects and Challenges
SSGB operates within the dynamic oil and gas industry. The Group anticipates a stable outlook for the sector in the coming months, with upstream and downstream activities remaining active despite persistent global concerns over tariff hikes and ongoing geopolitical conflicts. The Asia Pacific drilling sector, in particular, is highlighted as a strategic priority due to increasing energy needs and technological advancements, especially in countries like China, India, and Indonesia.
PETRONAS’s commitment to maintaining Malaysia’s oil and gas production at 2 million barrels of oil equivalent per day between 2025 and 2027, supported by major projects like the Kasawari gas field development, is expected to be a positive driver for SSGB’s drilling fluids business in the medium to long term.
However, the path forward is not without its challenges. The Group acknowledges that fluctuating oil prices, geopolitical tensions, and uncertainties in logistics and raw material prices will continue to pose headwinds. To mitigate these, SSGB plans to continuously monitor and adapt to market dynamics, focusing on cost optimization and margin protection.
A significant strategic move for SSGB’s future growth is its diversification into sustainable products. Post-quarter end, on 7 April 2025, the Group’s wholly-owned subsidiary, SSTCM, entered into a Licencing and Commercialisation Agreement with the Malaysian Palm Oil Board. This agreement enables SSGB to manufacture and commercialise palm-based intermediates, palm-based polyols, and bio-based polyester polyols. These products serve as feedstocks for polyurethane products and additives used across various industries, including construction, plastics, rubber, textiles, coatings, adhesives, sealants, elastomers, and paints. This new sustainable product line is poised to contribute positively to the Group’s financial performance once fully commercialised.
Summary and
SUMISAUJANA GROUP BERHAD’s first quarter 2025 report showcases a company in a significant transitional phase, having recently completed a major acquisition and successfully listed on the ACE Market. The strong revenue growth is a testament to its operational capabilities and market presence, particularly in key international markets. While foreign exchange fluctuations impacted profitability this quarter, the underlying operational performance remains robust, as indicated by the improved gross profit margin.
The Group’s strategic focus on the stable yet challenging oil and gas sector, coupled with its proactive diversification into sustainable palm-based chemicals, positions it for potential long-term growth. The IPO proceeds are strategically allocated to enhance operational infrastructure and R&D, which should support future expansion.
Key points to consider moving forward:
- Revenue Momentum: Will SSGB be able to maintain its strong revenue growth, especially from international markets, in subsequent quarters?
- FX Management: How effectively will the company manage foreign exchange risks, which significantly impacted PBT this quarter?
- Diversification Impact: The palm-based chemicals venture is promising. How quickly will this new segment be commercialized, and what will be its contribution to the Group’s bottom line?
- Operational Efficiency: Can the company continue to improve its gross profit margins amidst volatile raw material prices and logistics costs?
Overall, SSGB appears to be laying a solid foundation for future growth through strategic acquisitions, market expansion, and diversification. Its cautious optimism in the global oil and gas industry, combined with a forward-looking approach to sustainable product lines, makes it a company worth monitoring.
From a blogger’s perspective, SSGB’s Q1 2025 report highlights the importance of looking beyond just the headline profit figures. The underlying revenue growth and strategic diversification into new, sustainable product lines are compelling aspects of their story. The recent IPO and the planned utilisation of proceeds also signal a clear roadmap for expansion and value creation. The foreign exchange impact serves as a reminder of the global economic factors that can influence even fundamentally strong businesses.
What are your thoughts on SSGB’s first quarter performance and its strategic direction, especially with the new palm-based chemicals venture? Do you think the company can maintain this growth momentum and successfully navigate the challenges ahead? Share your insights in the comments below!
