Greetings, fellow investors and market watchers! Today, we’re diving into the latest quarterly report from Country Heights Holdings Berhad (CHHB) for the fifth quarter ended 31 March 2025. This report offers a fresh look at the company’s performance and strategic direction, though it comes with a unique challenge: a recent change in its financial year-end from 31 December to 30 June. This means we won’t see direct comparative figures for the corresponding quarter of the previous year in the profit and loss statement, which is crucial context as we navigate the numbers.
Despite the lack of direct year-on-year quarterly comparisons, the report reveals a period of significant operational adjustments and ongoing challenges for CHHB. The company recorded a loss for the quarter, largely impacted by finance costs. However, it also outlines forward-looking strategies across its diverse business segments, aiming to leverage economic tailwinds and internal improvements. Let’s break down the key takeaways and see what this means for CHHB’s journey ahead.
Key Financial Highlights: A Quarter of Adjustments
For the quarter ended 31 March 2025, Country Heights Holdings Berhad reported a total revenue of RM6.3 million. While this figure provides insight into the current operational scale, the absence of comparative data from the same quarter last year means we must focus on sequential quarter-on-quarter trends and the year-to-date performance for a fuller picture.
The Group recorded a loss before tax of RM10.7 million for the current quarter. This higher loss compared to the immediate preceding quarter was primarily attributed to default term loan interest and overdue interest charges, indicating ongoing financial pressures. Consequently, the loss attributable to equity holders stood at RM9.8 million, translating to a basic loss per share of 3.02 sen.
Current Quarter vs. Immediate Preceding Quarter (31 Mar 2025 vs. 31 Dec 2024)
Current Quarter (31 Mar 2025)
- Revenue: RM6,263k
- Loss before tax: RM(10,706)k
- Loss for the period (attributable to equity holders): RM(9,837)k
Immediate Preceding Quarter (31 Dec 2024)
- Revenue: RM9,837k
- Loss before tax: RM(1,561)k
- Loss for the period (attributable to equity holders): RM(3,023)k
The sequential comparison reveals a significant decrease in revenue from RM9.8 million in the preceding quarter to RM6.3 million, mainly due to lower contributions from property sales. The loss before tax also widened considerably from RM1.6 million to RM10.7 million, largely driven by increased finance costs.
Year-to-Date Performance: A Broader View
For the cumulative period ended 31 March 2025, CHHB generated a total revenue of RM59.4 million. The Group reported a loss before tax of RM7.3 million and a loss attributable to equity holders of RM7.3 million, resulting in a basic loss per share of 2.23 sen.
Segmental Performance Analysis (Year-to-Date 31 March 2025)
Let’s delve into how each business segment contributed to the overall performance:
| Operating Segment | Revenue (RM’000) | Operating Results (RM’000) |
|---|---|---|
| Healthcare | 17,363 | (2,490) |
| Resorts & Hospitality | 12,703 | (7,883) |
| Exhibition & Convention | 9,063 | (1,659) |
| Property | 20,257 | 16,150 |
The Property division was the sole profitable segment, contributing RM16.1 million in profit, primarily boosted by a disposal gain of RM6.8 million from Magnitude Knight (M) Sdn Bhd and a RM3.9 million land sale in the preceding quarter. This highlights the importance of asset monetisation in supporting the Group’s financials.
The Healthcare division recorded a loss of RM2.5 million, with higher losses attributed to the disposal of its 40% equity interest in European Wellness Retreat (KL) Sdn Bhd, which ceased operations in Q4 2023.
The Resorts & Hospitality division posted a significant loss of RM7.9 million, mainly due to the Mines Beach Resort Hotel being rented out to a third party from October 2024, effectively ceasing the Group’s direct hotel business operations there.
The Exhibition & Convention division also recorded a loss of RM1.6 million, though it continues to generate revenue from event functions and rental income.
Financial Health and Cash Flow
Looking at the balance sheet as of 31 March 2025, total assets stood at RM980.8 million, a slight decrease from RM1,007.4 million at 31 December 2023. Total equity also saw a modest reduction to RM602.2 million from RM614.8 million. Consequently, the net assets per share attributable to ordinary equity holders decreased from RM2.07 to RM1.87.
From a cash flow perspective for the year-to-date period, CHHB recorded net cash used in operating activities of RM3.2 million. However, this was partially offset by net cash generated from investing activities amounting to RM8.0 million, significantly driven by proceeds from the disposal of a subsidiary. Net cash used in financing activities was RM8.8 million, including loan repayments, but also saw proceeds from a private placement.
The Group successfully completed two tranches of its private placement, raising gross proceeds of RM1.508 million (first tranche) and RM3.8 million (second tranche), totalling RM5.308 million. These funds are earmarked for the refurbishment of the Palace of the Golden Horses Hotel and for working capital, demonstrating the company’s efforts to strengthen its financial position and invest in key assets.
Risks and Future Prospects: Navigating a Dynamic Landscape
The Malaysian economy continues to show resilience, with a 4.4% expansion in Q1 2025, supported by strong investment and improving exports. This broader economic stability provides a favourable backdrop for CHHB’s diversified operations. The company is actively pursuing several strategic initiatives across its segments:
- Healthcare: CHHB plans to introduce new sub-specialty treatments, enhance clinical care, and explore public-private partnerships. A significant focus is on expanding its share in Malaysia’s health tourism market, which is projected for considerable growth.
- Resorts & Hospitality: With a rebound in local and international travel, especially with visa-free access for Chinese travellers, the group’s hotels and resorts are poised to benefit. There’s also a strategic pivot towards strengthening domestic tourism.
- Exhibition & Convention (MICE): Recognizing the surge in demand within the logistics, health, and tourism industries, the Mines International Exhibition Centre (MIECC) is focusing on internal upgrades and building relationships with strategic partners for trade fairs.
- Property: Encouraging demand for premium and medium properties, coupled with ongoing projects and collaborative discussions, instils confidence that this sector will continue to contribute positively.
Despite these promising prospects, the report also highlights significant ongoing material litigations, particularly concerning loan defaults and winding-up petitions. These legal challenges pose a substantial risk to the Group’s financial stability and operational focus, requiring careful monitoring and strategic resolution. The substantial finance costs incurred in the latest quarter underscore the direct impact of these financial obligations.
Summary and
Country Heights Holdings Berhad’s latest quarterly report paints a mixed picture. While the Group faces immediate challenges, particularly a widening loss driven by higher finance costs and operational adjustments in some segments, it is also actively pursuing strategic initiatives to capitalise on the improving Malaysian economy and specific sectoral trends. The Property division remains a key asset, providing much-needed profitability through asset monetisation. The successful private placement also provides a capital injection for refurbishment and working capital.
However, the significant ongoing legal proceedings, especially those related to substantial loan obligations, represent a critical area of concern. The resolution of these litigations will be paramount to the Group’s ability to stabilise its financial position and fully execute its growth strategies.
Key risk points to monitor:
- High Finance Costs: The impact of default term loan interest and overdue interest charges on profitability.
- Material Litigations: The outcome and financial implications of the various ongoing lawsuits, particularly those related to loan defaults and winding-up petitions.
- Segmental Performance: The ability of the Healthcare, Resorts & Hospitality, and Exhibition & Convention divisions to return to profitability and contribute positively to the Group’s bottom line.
- Cash Flow Management: Sustaining positive cash flows from operations to reduce reliance on asset disposals or financing activities.
Country Heights Holdings Berhad is clearly navigating a complex period of transformation and challenge. While the company is taking steps to re-position its core businesses for future growth, the immediate financial pressures and legal uncertainties cannot be overlooked. Do you think CHHB’s strategic pivots in healthcare and tourism, alongside its property ventures, can effectively offset its current financial headwinds and legal entanglements in the coming quarters? Share your thoughts in the comments below!
