Unitrade Industries Berhad has just unveiled its financial results for the fourth quarter and full financial year ended 31 March 2025 (FY2025). This report offers a comprehensive look into the Group’s performance, strategic shifts, and future outlook. While the Group demonstrated resilience with overall full-year revenue growth, the final quarter presented a notable shift to a loss before tax, reflecting strategic adjustments and market challenges. Let’s dive into the details to understand the underlying currents shaping Unitrade’s journey.
Core Financial Highlights: A Mixed Picture
Unitrade’s latest financial report reveals a dynamic performance, with full-year growth contrasting with a challenging final quarter. This reflects the Group’s strategic pivot and the impact of external market conditions.
Full Financial Year Performance (FY2025 vs FY2024)
For the full financial year ended 31 March 2025, Unitrade recorded a commendable increase in revenue, driven by key strategic initiatives. However, profitability saw a significant reversal.
FY2025 (12 months ended 31.03.2025)
Revenue: RM1,759.0 million
Gross Profit: RM88.7 million
Loss Before Tax: RM(5.8) million
Loss After Tax: RM(7.2) million
Loss Per Share: (0.9) sen
FY2024 (12 months ended 31.03.2024)
Revenue: RM1,613.4 million
Gross Profit: RM85.0 million
Profit Before Tax: RM26.8 million
Profit After Tax: RM22.1 million
Earnings Per Share: 1.3 sen
The Group’s full-year revenue grew by 9.0% to RM1.8 billion. This growth was primarily fuelled by the robust performance of the metal recycling segment, which contributed RM819.2 million (46.6% of total revenue) following the successful acquisition of a metal recycling business on 8 January 2024. While the wholesale segment remained the largest revenue contributor, its revenue declined significantly as the Group strategically shifted away from lower-margin products.
Despite the revenue growth, the Group registered a loss before tax of RM5.8 million for FY2025, a stark contrast to the RM26.8 million profit in FY2024. This shift was mainly due to the absence of a one-off gain from the disposal of assets in FY2024, a substantial increase in inventory impairment charges to RM9.1 million (from RM2.9 million), and a rise in impairment losses on trade receivables to RM23.5 million (from RM12.1 million).
Fourth Quarter Performance (4Q2025 vs 4Q2024)
The fourth quarter individually reflected some of the challenges that led to the full-year loss, with revenue declining and profitability turning negative.
4Q2025 (3 months ended 31.03.2025)
Revenue: RM413.1 million
Gross Profit: RM21.3 million
Loss Before Tax: RM(1.2) million
Loss After Tax: RM(3.3) million
Loss Per Share: (0.4) sen
4Q2024 (3 months ended 31.03.2024)
Revenue: RM478.1 million
Gross Profit: RM21.7 million
Profit Before Tax: RM0.4 million
Loss After Tax: RM(1.0) million
Loss Per Share: (0.2) sen
For the fourth quarter, revenue decreased by 13.6% to RM413.1 million, primarily due to a strategic reduction in lower-margin products within the wholesale segment. While gross profit saw a slight decline of 1.8%, the gross profit margin actually improved by 0.7 percentage points to 5.2%, indicating the positive impact of the Group’s strategic shift. However, increased net impairment loss on trade receivables to RM6.8 million (from RM3.8 million) and inventory impairment charges to RM3.3 million (from RM0.5 million in 3Q2025) led to a loss before tax of RM1.2 million for the quarter.
Segmental Performance: Shifting Contributions
The report highlights significant shifts in the contribution of Unitrade’s business segments:
- Wholesale & Distribution: Despite a strategic reduction in lower-margin products, this segment remained the largest revenue contributor for the full year, although its contribution decreased compared to the previous year. The strategic shift is aimed at improving overall profitability, even if it means lower top-line figures for this segment.
- Metal Recycling: This segment emerged as a significant growth driver, with its substantial contribution to revenue following the recent acquisition. This clearly indicates Unitrade’s successful diversification strategy.
- Manufacturing & Rental: Both segments showed steady performance, with the rental division continuing its momentum and planning to expand its equipment portfolio.
Financial Health: A Stable Foundation
Unitrade’s balance sheet as at 31 March 2025 shows a robust financial position, despite the period’s profitability challenges. Total assets stood at RM1,008.9 million, with total equity increasing to RM366.1 million. The Group’s total borrowings saw a slight decrease to RM532.2 million, reflecting prudent financial management.
From a cash flow perspective, the Group demonstrated strong operational cash generation, with net cash from operating activities significantly increasing to RM49.0 million from RM15.6 million in the previous year. This improved operational cash flow is a positive sign, indicating the Group’s ability to generate cash from its core business, even amidst strategic adjustments and impairment charges.
Risks and Prospects: Navigating Challenges, Seizing Opportunities
Unitrade acknowledges the ongoing volatility in external market conditions, influenced by geopolitical risks and trade tensions. However, the Group does not anticipate a material impact from tariff charges due to its primarily domestic sales and sourcing strategies. In response, Unitrade is implementing rigorous cost controls, strengthening credit management, and optimizing inventory to minimise losses and expenses.
Strategic Growth Pillars:
Metal Recycling Expansion: The completed acquisition of a 51% equity interest in Kien San Metal Sdn Bhd (KSMSB) in April 2025 is a significant step. This move is set to expand Unitrade’s national presence in the metal recycling industry, enhance its capabilities, and strengthen its earnings base, reinforcing its upstream position in the steel value chain and supporting the circular economy.
Solar Energy Growth: The wholesale distribution segment’s solar product distribution continues to contribute positively. Unitrade is well-positioned to benefit from Malaysia’s large-scale renewable energy projects (LSS5, LSS5+, LSS6) and the growing rooftop solar adoption in both commercial & industrial (C&I) and residential segments, especially with initiatives like the Community Renewable Energy Aggregation Mechanism (CREAM).
Enhanced Manufacturing Capabilities: The new pipe fabrication centre, which commenced operations in March 2025, is equipped with advanced technology like robotic arms and an epoxy powder coating line. This facility is expected to enhance end-to-end pipe services and broaden the Group’s revenue streams.
Diversified Rental Portfolio: The rental division, already strong in temporary structural support equipment and centralised labour quarters, is expanding its offerings to include crawler crane rentals, scissor lifts, sky lifts, and boom lifts, catering to evolving market needs.
These strategic initiatives are crucial as Unitrade aims to improve its financial health and position itself for sustainable growth as market conditions improve.
Summary and
Unitrade Industries Berhad’s FY2025 results present a narrative of strategic transition. While the full year saw revenue growth, driven by a successful diversification into metal recycling, the profitability was impacted by a strategic shift away from lower-margin wholesale products and increased impairment losses. The fourth quarter specifically highlighted these challenges, leading to a loss. However, the Group’s proactive measures in cost control, credit management, and strategic investments in high-growth areas like metal recycling and solar energy position it for potential recovery and sustainable growth.
It is important to note that this blog post is for informational purposes only and does not constitute any form of investment advice or recommendation to buy or sell shares. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.
Key points for consideration from the report:
- The Group experienced a significant shift from profit to loss for both the fourth quarter and the full financial year, primarily due to increased impairment losses on trade receivables and inventories, and the absence of a one-off gain recorded in the previous year.
- While full-year revenue grew, the overall gross profit margin decreased, influenced by the lower margins in the newly acquired metal recycling segment and higher impairment charges.
- External market conditions, including geopolitical risks and trade tensions, remain a factor, although Unitrade believes it is not materially impacted by US tariffs.
- The strategic pivot towards higher-margin businesses in wholesale and significant expansion in metal recycling are critical long-term growth drivers.
- The Group’s operating cash flow saw a healthy improvement, which is a positive sign for its financial stability.
Unitrade’s journey reflects a company actively adapting to market dynamics and repositioning itself for future growth. The strategic acquisitions and expansions into metal recycling and solar energy demonstrate a clear vision for diversification and value creation. The immediate financial performance might show some headwinds, but the underlying strategic shifts appear to be laying a foundation for a more resilient and diversified business model.
What are your thoughts on Unitrade’s pivot towards higher-margin businesses and its expansion into metal recycling and solar energy? Do you think the company can maintain this growth momentum in the next few years, especially with its new ventures coming online? Share your views in the comments section below!
