METROD HOLDINGS BERHAD Q1 2025: A Look Beyond the Top-Line Growth
Greetings, fellow investors! Today, we’re diving into the latest financial report from METROD HOLDINGS BERHAD for the first quarter ended 31 March 2025. This report offers a fascinating, albeit mixed, picture of the company’s performance, showcasing robust revenue growth while also revealing some notable shifts in profitability and cash flow dynamics. Let’s peel back the layers and see what’s truly happening under the hood.
The headline might suggest a straightforward growth story, but a closer look at the figures, especially those pertaining to profit attributable to owners and cash flow, reveals areas that warrant our attention. METROD has managed to boost its top line significantly, but the journey through the income statement and cash flow statement presents a more nuanced narrative. Ready to explore?
Core Data Highlights: Unpacking the Numbers
Overall Performance Snapshot
METROD HOLDINGS BERHAD kicked off the financial year with impressive revenue growth, demonstrating its ability to expand its market presence. However, while overall profit before tax saw an increase, the profit attributable to the owners of the company experienced a notable decline. This divergence is a key point we’ll explore.
Top-line Growth: Revenue Soars
The company recorded a strong increase in revenue, indicating healthy business activity and market demand. This growth is a positive sign, reflecting the company’s operational strength in generating sales.
Q1 2025 Revenue
RM 1,524,615,000
Q1 2024 Revenue
RM 1,328,215,000
This represents an increase of approximately 14.8% compared to the same period last year.
Profitability Picture: A Mixed Bag
While the company’s profit before tax improved, a deeper dive into the profit attributable to shareholders reveals a different story. This suggests that non-controlling interests have claimed a larger share of the overall profit this quarter, or their segments performed better, impacting the earnings for the company’s direct owners.
Profit Before Tax
Q1 2025 Profit Before Tax
RM 7,858,000
Q1 2024 Profit Before Tax
RM 6,400,000
An increase of approximately 22.8%.
Profit Attributable to Owners of the Company
Q1 2025 Profit Attributable to Owners
RM 1,641,000
Q1 2024 Profit Attributable to Owners
RM 2,892,000
A significant decrease of approximately 43.3%.
Basic Earnings Per Share (EPS)
Q1 2025 Basic EPS
1.37 sen
Q1 2024 Basic EPS
2.41 sen
Reflecting the decline in attributable profit, basic EPS also saw a decrease of approximately 43.2%.
Balance Sheet Stability: Managing Assets and Liabilities
The company’s financial position shows a slight increase in total equity, indicating overall stability. However, there’s also an observable increase in current borrowings, which is something to keep an eye on.
| Financial Position Item | As at 31/3/2025 (RM’000) | As at 31/12/2024 (RM’000) |
|---|---|---|
| Total Non-current assets | 826,981 | 836,661 |
| Total Current assets | 1,335,742 | 1,300,339 |
| Net Current Assets | 150,121 | 133,255 |
| Total Equity | 714,691 | 709,276 |
| Current Borrowings | 1,122,819 | 1,040,175 |
Net current assets have improved, which is a positive sign for short-term liquidity. However, the rise in current borrowings indicates increased reliance on short-term debt, which warrants further monitoring.
Cash Flow Dynamics: A Shift in Operations
One of the most striking aspects of this report is the significant shift in operating cash flow, moving from a positive inflow in the previous year to a substantial outflow in the current quarter. This suggests that the company’s core operations consumed cash during this period, which could be due to changes in working capital or operational efficiency.
Q1 2025 Net Operating Cash Flow
RM -121,688,000
Q1 2024 Net Operating Cash Flow
RM 50,770,000
This substantial reversal in operating cash flow is a critical area for stakeholders to observe, as sustained negative operating cash flow can indicate underlying operational challenges or significant investments in working capital.
Cash and Cash Equivalents at End of Period
Q1 2025 Cash & Equivalents
RM 235,695,000
Q1 2024 Cash & Equivalents
RM 276,148,000
The decrease in cash and cash equivalents further underscores the liquidity challenges faced during the quarter, despite successful financing activities.
Risk and Prospect Analysis: Navigating the Landscape
METROD’s Q1 2025 report paints a picture of a company actively engaged in its market, as evidenced by its revenue growth. However, like any business, it operates within an environment shaped by various factors. The decline in profit attributable to owners, despite an increase in overall profit before tax, suggests internal profit distribution dynamics or varying performance across segments that affect the parent company’s share.
Looking ahead, the company’s ability to convert its strong revenue into sustainable and growing profit for its shareholders will be paramount. The shift to negative operating cash flow is a key area of focus; understanding the underlying reasons for this and the company’s strategies to reverse this trend will be crucial for its long-term financial health. Managing working capital effectively and optimizing operational costs will be vital to improve cash generation from core activities.
The increase in borrowings, both current and non-current, indicates a reliance on debt financing. While debt can fuel growth, its prudent management is essential, especially in a rising interest rate environment or if cash generation remains subdued. The company’s strategies to manage its debt profile and ensure adequate liquidity will be key to navigating potential economic headwinds.
Despite these challenges, the company’s consistent revenue growth suggests a robust market position. Its prospects will largely depend on its ability to enhance operational efficiency, control costs, and ensure that growth translates into stronger bottom-line results for its shareholders. The company’s management will likely focus on these areas to improve shareholder value in the coming quarters.
Summary and
METROD HOLDINGS BERHAD’s Q1 2025 report presents a mixed financial narrative. The company achieved strong revenue growth, showcasing its market strength. However, the decline in profit attributable to the owners of the company and the significant negative operating cash flow are areas that warrant careful consideration. The increase in borrowings also points to a need for vigilant financial management.
For Malaysian retail investors, understanding these nuances is key. While the top-line performance is encouraging, the internal dynamics of profit distribution and cash generation require close monitoring. The company’s ability to address these aspects will be crucial for its future performance.
Key points to monitor moving forward:
- Profit Attributable to Owners: How will the company improve its share of the overall profit?
- Operating Cash Flow: Will the company be able to revert to positive operating cash flow and sustain it?
- Borrowings Management: How will the company manage its increasing debt levels and associated finance costs?
- Operational Efficiency: What strategies will be implemented to ensure revenue growth translates into stronger shareholder returns?
What are your thoughts on METROD’s latest performance? Do you believe the company can maintain its revenue momentum while addressing the profitability and cash flow challenges? Share your insights in the comments below!
For more in-depth analysis of Malaysian companies, check out our recent articles on [Related Article 1] and [Related Article 2].
