Aurelius Technologies Kicks Off 2025 with Strong Revenue Growth Amidst Market Headwinds
Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest unaudited condensed interim financial statement for Aurelius Technologies Berhad (ATech) for the first quarter ended 31 March 2025. As a prominent player in Malaysia’s electronics manufacturing services (EMS) sector, ATech’s performance offers crucial insights into both the company’s health and the broader industry landscape.
The report reveals a robust start to the year with significant revenue growth, signaling strong operational momentum. However, it also highlights the persistent challenges from a dynamic global environment. What truly stands out is ATech’s ability to navigate these complexities while delivering a healthy profit and even announcing a new dividend. Let’s unwrap the key figures and strategic moves that define this quarter’s performance.
Unpacking the Financial Performance
ATech has demonstrated a commendable performance in the first quarter of 2025. Despite typical seasonal slowdowns often seen in Q1 due to festive periods, the company managed to achieve impressive growth, primarily driven by increased orders in key segments.
Quarterly Financial Snapshot (Q1 2025 vs. Q1 2024)
Q1 2025
Revenue: RM147,853,367
Gross Profit: RM22,544,603
Profit Before Tax: RM20,814,385
Profit for the Period: RM16,097,693
Basic EPS: 3.71 sen
Q1 2024
Revenue: RM125,700,754
Gross Profit: RM20,184,657
Profit Before Tax: RM21,017,782
Profit for the Period: RM15,729,571
Basic EPS: 4.00 sen
As you can see, revenue surged by 17.6% compared to the same quarter last year, reaching RM147.8 million. This strong top-line growth translated into an 11.7% increase in gross profit to RM22.5 million. While profit before tax saw a slight dip of 1.0%, net profit for the period still registered a positive growth of 2.3%, arriving at RM16.1 million. The basic Earnings Per Share (EPS) saw a slight decrease from 4.00 sen to 3.71 sen, primarily due to an increase in the weighted average number of ordinary shares issued.
Revenue by Product Segment
The growth was largely propelled by the Communication and Internet of Things (IoT) products segment, which now constitutes a dominant portion of the revenue.
| Product Segment | Q1 2025 Revenue (RM) | Q1 2024 Revenue (RM) | Change (%) |
|---|---|---|---|
| Communications and IoT products | 124,565,566 | 95,220,572 | 30.8% |
| Electronics devices | 15,233,120 | 24,972,603 | (39.0%) |
| Semiconductor components | 8,054,681 | 5,507,579 | 46.2% |
The Communications and IoT products segment soared by 30.8%, now contributing 84.2% of total revenue. Semiconductor components also saw an impressive 46.2% increase. However, the Electronics devices segment experienced a notable decline, which is an area to monitor.
Geographical Revenue Distribution
From a geographical perspective, the Americas market continues to be a strong growth driver for ATech.
| Geographical Market | Q1 2025 Revenue (RM) | Q1 2024 Revenue (RM) | Change (%) |
|---|---|---|---|
| MALAYSIA | 33,270,421 | 31,816,305 | 4.6% |
| AMERICAS | 88,139,185 | 63,324,896 | 39.2% |
| ASIA PACIFIC (excluding Malaysia) | 17,553,624 | 19,648,827 | (10.7%) |
| EUROPE | 8,890,137 | 10,910,726 | (18.5%) |
The Americas market showed a remarkable 39.2% growth, reinforcing its position as a key revenue generator. While Malaysia also saw a modest increase, Asia Pacific and Europe experienced declines, suggesting a shifting focus or demand in these regions.
Financial Health & Cash Flow
Looking at the balance sheet, total assets stood at RM641.3 million as of 31 March 2025, with total equity increasing to RM504.4 million from RM488.3 million at the end of 2024. This translates to a Net Assets per share of RM1.16, up from RM1.13.
Cash flow from operating activities remained healthy at RM9.26 million. However, cash flow from investing activities saw a net outflow of RM29.22 million, largely due to significant investments in short-term instruments. It’s worth noting that ATech has substantially reduced its borrowings, with term loans/Islamic financing being fully settled, reflecting a stronger financial position.
Navigating the Headwinds: Risks and Strategic Outlook
While the first quarter results are encouraging, ATech acknowledges the persistent challenges within the global EMS industry. The company is operating in an environment characterized by global economic uncertainties, geopolitical tensions, supply chain disruptions, and market volatilities. The impact of trade prohibitions and retaliatory tariffs between major economies could further increase costs and impede growth.
Key Operational Challenges Highlighted:
- Weakening of the United States dollar (USD) against Ringgit Malaysia (RM) in Q1 2025, impacting gross profit margins.
- Increase in the National Minimum Wage effective February 2025.
- Higher headcount and associated costs due to increased operational capacity.
- A 25% increase in electricity base tariff from January 2025.
- Rising operational costs following the removal of diesel subsidies from June 2024.
Despite these challenges, ATech is not standing still. The company remains prudent and cautious, focusing on strategic investments to enhance its technological infrastructure and capabilities. These investments are aimed at unlocking new growth opportunities with both existing long-term customers and potential new clients. A key strategic direction is the expansion into high-growth sectors such as automotive, fintech, and artificial intelligence (AI) industries. The company is also actively exploring new investment opportunities stemming from global supply chain and trade diversion trends favoring Malaysia.
A significant milestone is the commencement of manufacturing and test activities at its new integrated manufacturing plant, P5. This facility, spanning 243,977 square feet, is prioritizing new product initiative (NPI) activities for advanced IoT, automotive, and AI-related products, alongside the acquisition of new customers. ATech’s order book stood at approximately RM494.6 million as of 19 May 2025, which provides a solid foundation for future revenue.
The Group is also committed to enhancing operational efficiency through process automation and expanding its 16-line surface mount technology (SMT) infrastructure to meet growing demand. Barring unforeseen circumstances and further escalation of global trade tensions, ATech maintains a cautiously optimistic outlook for the financial year ending 31 December 2025.
Summary and Future Outlook
Aurelius Technologies Berhad has delivered a commendable first quarter, showcasing strong revenue growth driven by its core Communication and IoT segment and expansion in the Americas market. The company’s proactive steps to manage its balance sheet, including significant debt reduction, highlight a sound financial management approach. Despite facing a multitude of external economic and operational challenges, ATech’s strategic investments in new technologies and manufacturing capabilities, coupled with its focus on high-growth sectors like automotive and AI, position it well for long-term resilience and growth.
The strong order book and ongoing initiatives to enhance operational efficiency suggest a continued positive trajectory for the company. While the macroeconomic environment remains uncertain, ATech’s cautious yet optimistic outlook reflects a realistic understanding of the market combined with a clear strategic roadmap.
Key risk points to keep an eye on include:
- Continued volatility of foreign exchange rates, particularly the USD against RM.
- Potential escalation of global trade wars and geopolitical tensions impacting supply chains and costs.
- Rising operational costs from increased wages, electricity tariffs, and fuel prices.
- The ability to successfully commercialize new product initiatives and acquire new customers in competitive automotive, fintech, and AI sectors.
In my professional view, ATech’s Q1 2025 report paints a picture of a company actively adapting and investing for the future, rather than merely reacting to current challenges. The disciplined approach to managing costs and debt, while simultaneously expanding capacity and diversifying into new high-potential areas, is a testament to its strategic foresight.
Do you think ATech can maintain this growth momentum and successfully navigate the global headwinds in the coming quarters? Share your thoughts in the comments section below! And if you found this analysis helpful, be sure to check out our other deep dives into Malaysian companies.
