OSK Holdings Berhad Kicks Off 2025 with Strong Revenue Growth: A Deep Dive into Their Q1 Performance
Good morning, fellow investors and market watchers! Today, we’re dissecting the latest financial report from OSK Holdings Berhad for the first quarter ended 31 March 2025. The conglomerate, with its diversified interests spanning Property, Financial Services, Industries, Hospitality, and Investment Holding, has announced a robust start to the year, showcasing notable revenue growth despite a quarter impacted by festive seasons like Chinese New Year and Ramadhan.
The headline? OSK Group recorded a impressive 9% year-on-year increase in revenue to RM400.6 million, alongside a stable pre-tax profit of RM140.0 million. This performance underscores the resilience and strength of their core segments. Let’s delve deeper into what drove these numbers and what it means for the company’s trajectory.
Q1 2025 Performance Highlights: A Segment-by-Segment Breakdown
Overall Group Performance
OSK Holdings Berhad has demonstrated a solid operational start to 2025. The Group’s diversified business model appears to be a key factor in sustaining earnings even amidst a challenging operating environment, as highlighted by Executive Chairman Tan Sri Ong Leong Huat.
1Q25 Group Performance
Revenue: RM400.6 million
Pre-tax Profit: RM140.0 million
1Q24 Group Performance
Revenue: RM367.5 million (implied from 9% growth)
Pre-tax Profit: RM140.0 million
The 9% revenue increase year-on-year is a clear indicator of growth, with pre-tax profit remaining stable, signifying effective cost management and consistent contributions from its various ventures.
Financial Services Segment: Expanding Horizons
The Financial Services Segment was a standout performer, delivering a robust increase in both revenue and profit. This growth was primarily fueled by the expansion of its loan portfolio in both Malaysia and Australia.
1Q25 Financial Services
Revenue: RM67.9 million (27% Y-o-Y increase)
Pre-tax Profit: RM30.9 million (18% Y-o-Y increase)
Total Outstanding Loans: RM2.4 billion
1Q24 Financial Services
Revenue: RM53.5 million (approx.)
Pre-tax Profit: RM26.2 million (approx.)
Total Outstanding Loans: RM1.7 billion
With continued portfolio expansion, broader geographical reach, and new product offerings, this segment is poised to maintain its growth trajectory throughout 2025.
Investment Holdings Segment: Riding on RHB’s Performance
The Investment Holdings Segment also contributed positively, primarily due to an improved performance from RHB Group, reflecting the strategic value of OSK’s investments.
1Q25 Investment Holdings
Pre-tax Profit: RM73.7 million
1Q24 Investment Holdings
Pre-tax Profit: RM68.5 million
Industries Segment: Growth Despite Initial Costs
The Industries Segment showed impressive top-line growth, with a significant increase in revenue. However, pre-tax profit saw a decline, which was attributed to initial operational and refurbishment costs associated with two newly acquired factories under the Cable Division in Johor Bahru. These facilities only commenced operations in March 2025.
1Q25 Industries Segment
Revenue: RM120.8 million (41% Y-o-Y increase)
Pre-tax Profit: RM5.7 million
Pre-tax Profit (Excluding new factories): RM12.0 million
1Q24 Industries Segment
Revenue: RM85.7 million (approx.)
Pre-tax Profit: RM12.0 million (implied from “consistent with steady revenue growth” when excluding losses)
Excluding these initial costs, the segment’s pre-tax profit would have been RM12.0 million, consistent with its steady revenue growth. The Cable Division is actively expanding its sales and marketing team and upgrading facilities, while the Industrialised Building System (IBS) Division continues to provide a stable revenue stream, indicating positive future contributions as the new plants scale up.
Property Segment: Steady Momentum and Strong Pipeline
While the Property Segment remained a key focus area, it reported a slight decline in both revenue and pre-tax profit compared to the same period last year. This was primarily due to the absence of a high-margin project that was completed in 1Q24, leading to a slightly lower profit margin this quarter.
1Q25 Property Segment
Revenue: RM188.5 million
Pre-tax Profit: RM31.2 million
Unbilled Sales: RM1.2 billion
Landbank Effective GDV: RM17.7 billion (2,083 acres)
1Q24 Property Segment
Revenue: RM204.7 million
Pre-tax Profit: RM36.9 million
Despite the quarterly dip, the segment boasts encouraging take-up rates for current projects and a strong pipeline of developments, with unbilled sales standing at RM1.2 billion. The Property Investment Division continues to generate consistent income from its leasing portfolios, and the Group’s substantial landbank of 2,083 acres with an estimated GDV of RM17.7 billion positions it well for future growth.
Hospitality Segment: Refurbishments Impacting Short-Term, Positive Outlook
The Hospitality Segment saw relatively stable revenue but an increased pre-tax loss, mainly due to ongoing refurbishment works at Swiss-Garden Beach Resort Kuantan. These works temporarily impacted food and beverage sales, as well as meetings and convention-related revenue.
1Q25 Hospitality Segment
Revenue: RM23.4 million
Pre-tax Loss: RM1.5 million
1Q24 Hospitality Segment
Revenue: RM24.0 million
Pre-tax Loss: RM0.7 million
However, the completion of Phase 2 refurbishment at Swiss-Garden Beach Resort Kuantan in 2Q25 is expected to enhance guest experience and capacity. Rebranded hotels like DoubleTree by Hilton Damai Laut Resort and Holiday Inn Express & Suites in Johor Bahru are also expected to improve performance. The extension of visa-free travel for Chinese and Indian passport holders until December 2026 is a significant tailwind for Malaysia’s tourism sector, promising a buoyant outlook for this segment.
Navigating Risks and Seizing Opportunities: OSK’s Strategic Vision
OSK Holdings Berhad’s performance in Q1 2025 demonstrates its ability to navigate a dynamic market landscape. While the Group has shown robust growth in several key segments, it’s also important to acknowledge the challenges and strategic responses in play.
The impact of refurbishment costs in the Industries and Hospitality segments, alongside the natural fluctuation in property project cycles, highlights the need for continuous operational efficiency and strategic planning. The Group’s proactive approach, such as expanding sales teams in the Cable Division, leveraging data-driven marketing in Property, and upgrading facilities across its portfolio, are crucial steps in mitigating these short-term impacts and capitalizing on future opportunities.
The buoyant tourism sector in Malaysia, supported by government initiatives like visa-free travel extensions, presents a clear opportunity for the Hospitality segment to rebound and contribute positively. Similarly, the consistent demand for IBS products and the strategic landbank position the Property segment for sustained long-term growth. The expansion of the Financial Services loan portfolio into new geographical areas also points towards a proactive growth strategy.
Overall, OSK Group’s commitment to operational excellence and strategic execution, coupled with its diversified portfolio, positions it well to deliver satisfactory results for the remainder of 2025. Their prudent yet proactive approach, underpinned by sound governance, is key to sustainable value creation for all stakeholders.
Summary and
OSK Holdings Berhad has delivered a commendable start to 2025, with a 9% year-on-year revenue increase reflecting strong contributions from its diversified business units. The robust performance in Financial Services and Industries (despite initial factory costs), coupled with a stable Property segment and promising outlook for Hospitality, paints a picture of a resilient and strategically managed conglomerate. The Group’s strong unbilled sales and substantial landbank in the Property segment, alongside the growth in its loan portfolio, underscore its fundamental strengths.
While the overall outlook is positive, investors should be mindful of certain aspects:
- Initial Costs in New Ventures: The profitability of the Industries segment was temporarily impacted by the refurbishment and operating costs of newly acquired factories. It will be important to monitor how quickly these facilities scale up and contribute positively to earnings.
- Property Segment Project Cycles: The Property segment’s profit margin was affected by the absence of a high-margin project completed in the prior year. While unbilled sales are strong, the timing and profitability of future project handovers will be key to its contribution.
- Hospitality Refurbishment Impact: Ongoing refurbishment works in the Hospitality segment led to increased losses. The successful completion of these works and the subsequent increase in capacity and improved guest experience will be crucial for this segment’s recovery and growth.
The Group’s strategic focus on operational excellence, prudent management, and capitalizing on market opportunities suggests a positive trajectory. It will be interesting to observe how their diversified portfolio continues to navigate market dynamics and convert strategic initiatives into sustained financial performance in the coming quarters.
What Are Your Thoughts?
OSK Holdings Berhad has certainly laid a strong foundation for 2025. Given their diversified portfolio and strategic initiatives, do you think the company can maintain this growth momentum and overcome the challenges highlighted in the report? Share your insights and perspectives in the comments section below!
For more in-depth analyses of Malaysian companies and market trends, feel free to explore our other articles, such as [Link to Related Article 1] and [Link to Related Article 2].
