3REN BERHAD Navigates Q1 2025: A Deep Dive into Their Latest Financials
Greetings, fellow investors and market enthusiasts! Today, we’re unboxing the latest financial report from 3REN BERHAD for the first quarter ended 31 March 2025 (Q1 FY2025). As a player in Malaysia’s burgeoning semiconductor and automation sectors, 3REN’s performance offers key insights into the industry’s pulse.
This report marks 3REN’s third interim financial report since its listing, meaning we don’t have direct year-on-year comparative figures for the first quarter’s profit and loss. However, we’ll delve into the Quarter-on-Quarter performance against the immediate preceding quarter (Q4 FY2024) to gauge their recent trajectory. One notable highlight from the report is the RM3.25 million interim dividend paid for FY2024, reflecting a commitment to shareholder returns.
Q1 FY2025 Performance: A Closer Look
Let’s break down the core numbers that define 3REN’s Q1 FY2025. While direct year-ago comparisons for the first quarter are not available, comparing against the immediate preceding quarter (Q4 FY2024) gives us a valuable perspective on recent operational trends.
Revenue and Profitability: A Quarter-on-Quarter Shift
The first quarter of 2025 saw a moderation in 3REN’s top and bottom lines when compared to the robust performance of Q4 FY2024. Here’s how the key figures stack up:
Q1 FY2025
- Revenue: RM22.18 million
- Gross Profit: RM3.73 million
- Profit Before Tax (PBT): RM0.66 million
- Profit After Tax (PAT): RM0.55 million
- Basic EPS: 0.09 sen
Q4 FY2024
- Revenue: RM28.87 million
- Gross Profit: RM8.96 million
- Profit Before Tax (PBT): RM3.14 million
- Profit After Tax (PAT): RM1.95 million
- Basic EPS: (Not explicitly stated for Q4, but implied higher)
As you can see, 3REN recorded a revenue of RM22.18 million, marking a 23.16% decline from Q4 FY2024. This dip was primarily attributed to lower sales from automation solutions and product engineering services, following the completion of certain projects in the previous quarter. Additionally, timing differences in revenue recognition for some automation jobs pending acceptance also played a role.
Consequently, Gross Profit decreased by RM5.23 million, leading to a significant drop in profitability. PBT and PAT for the current quarter were lower by 79.12% and 71.99% respectively, reflecting the impact of reduced revenue and gross profit. It’s worth noting that this decline was partially offset by higher contributions from engineering support services for IC assembly and testing, indicating some resilience in specific segments.
Segmental Contributions
Delving deeper into revenue streams, 3REN’s Q1 FY2025 revenue was primarily driven by its engineering services segments, which include product engineering services and engineering support services. These segments collectively contributed 71.90% of the total revenue, with the remainder coming from automation solutions (digitalised solutions and automated equipment).
| Reportable Segments | Revenue (RM’000) | Segment Results (RM’000) |
|---|---|---|
| Product Engineering Services | 7,945 | 458 |
| Manufacturing Operating Solutions and Services | 14,237 | 59 |
| Total | 22,182 | 517 |
Geographically, Malaysia remains the dominant market, contributing RM21.82 million to the revenue, with the majority denominated in Malaysian Ringgit. This strong domestic focus provides a stable base amidst global uncertainties.
Financial Health: Balance Sheet and Cash Flow
Let’s briefly examine 3REN’s financial position as at 31 March 2025, compared to 31 December 2024:
- Total Assets: Decreased slightly to RM116.24 million from RM119.57 million.
- Total Equity: Decreased to RM95.04 million from RM97.50 million, primarily due to the dividend payment.
- Total Liabilities: Also saw a decrease to RM21.20 million from RM22.07 million.
From a cash flow perspective, 3REN generated RM1.46 million in net cash from operating activities during Q1 FY2025. However, this was offset by cash used in investing activities (RM0.71 million, mainly for intangible assets and property, plant & equipment) and financing activities (RM3.52 million, largely due to the RM3.25 million dividend payment). This resulted in a net decrease in cash and cash equivalents of RM2.77 million for the quarter.
Risks and Prospects: Navigating the Future
Despite the Quarter-on-Quarter moderation, 3REN remains cautiously optimistic about its industry outlook for FY2025. The company believes it is well-positioned to leverage Malaysia’s burgeoning semiconductor industry, bolstered by the National Semiconductor Strategy, and the accelerating adoption of factory automation, digitalisation, artificial intelligence (AI), and machine learning (ML).
The report acknowledges the continuation of geopolitical and economic uncertainties, which pose potential risks. However, 3REN’s strategy involves continuous efforts to diversify and grow its customer base, actively seeking new orders from both existing and new clients across all its business segments. This proactive approach aims to mitigate reliance on a few large projects and broaden revenue streams.
A notable update is the reallocation of RM7.60 million previously earmarked for bank borrowings repayment to working capital requirements, with an extended utilisation timeframe until November 2026. This move could provide greater operational flexibility and support ongoing projects and growth initiatives.
Summary and
3REN BERHAD’s Q1 FY2025 report indicates a period of adjustment following a strong preceding quarter. While revenue and profits saw a Quarter-on-Quarter decline, attributed to project completions and revenue recognition timing, the underlying business segments show continued activity. The dividend payment for FY2024 underscores the company’s commitment to shareholder returns.
Looking ahead, 3REN is strategically aligned with key growth drivers in Malaysia’s technology sector, particularly in semiconductors, automation, and AI. Their focus on customer diversification and securing new orders is a prudent strategy to navigate potential market volatilities. The reallocation of funds to working capital also suggests a focus on operational agility and growth support.
Key points from the report:
- Revenue Moderation: Q1 FY2025 revenue and profits saw a Quarter-on-Quarter decline from Q4 FY2024, primarily due to project completion cycles and revenue recognition timing.
- Strategic Alignment: The company is well-positioned to benefit from the National Semiconductor Strategy and the growing adoption of factory automation, digitalisation, AI, and ML.
- Operational Focus: Continued efforts on customer base diversification and securing new orders are key strategies for future growth.
- Financial Prudence: The reallocation of funds to working capital indicates a focus on supporting ongoing operations and growth initiatives.
- Shareholder Return: The interim dividend paid for FY2024 demonstrates a commitment to returning value to shareholders.
It’s important for investors to consider these factors in the context of the company’s long-term growth trajectory and the broader industry landscape.
Final Thoughts and What’s Next
3REN BERHAD’s Q1 FY2025 results present a mixed picture of a company navigating project cycles and market dynamics. While the immediate Quarter-on-Quarter performance shows a dip, their strategic positioning within the thriving Malaysian tech ecosystem, especially in semiconductors and automation, suggests potential for future growth.
What are your thoughts on 3REN’s latest quarter? Do you believe their strategy to diversify and expand their customer base will effectively counter market uncertainties and drive future growth? Share your insights in the comments below!
For more detailed analysis and updates on Malaysian companies, be sure to check out our other recent articles:
