MIKRO MSC BERHAD: Strong Quarterly Growth Amidst Strategic Diversification
Greetings, fellow investors and market watchers! We’re diving deep into MIKRO MSC BERHAD’s latest financial report for the third quarter ended 31 March 2025. This report offers a fascinating look into the company’s performance, highlighting robust quarterly growth and significant strategic shifts. While the immediate quarter’s results paint a positive picture, a closer look at the year-to-date figures reveals some important dynamics at play.
MIKRO MSC BERHAD, a Malaysian-incorporated company, continues to navigate a competitive landscape while actively pursuing growth and diversification. Let’s break down the key figures and strategic moves that define this reporting period.
Q3 FY2025 Performance Highlights: A Quarter of Strong Growth
MIKRO MSC BERHAD delivered an impressive performance in the third quarter of Financial Year 2025 (Q3 FY2025), demonstrating strong top-line and bottom-line growth compared to the same period last year. This growth was primarily fueled by a significant increase in overseas sales.
Q3 FY2025
Revenue: RM18.2 million
Profit Before Tax (PBT): RM4.3 million
Profit After Tax (PAT): RM3.4 million
Basic Earnings Per Share: 0.28 sen
Q3 FY2024
Revenue: RM12.9 million
Profit Before Tax (PBT): RM3.0 million
Profit After Tax (PAT): RM2.8 million
Basic Earnings Per Share: 0.26 sen
Revenue surged by 40.7% to RM18.2 million, while Profit Before Tax jumped by 45.1% to RM4.3 million. This substantial improvement reflects not only increased sales but also an enhanced gross profit margin, which rose from 26% in the previous corresponding quarter to a healthy 43% in Q3 FY2025. This indicates a successful shift towards higher-margin products despite a competitive market.
Sequential Quarter Performance: Maintaining Momentum
Comparing the current quarter to the immediate preceding quarter (Q2 FY2025), MIKRO MSC BERHAD continued its upward trajectory:
Q3 FY2025
Revenue: RM18.2 million
Profit Before Tax (PBT): RM4.3 million
Profit After Tax (PAT): RM3.4 million
Q2 FY2025
Revenue: RM16.8 million
Profit Before Tax (PBT): RM3.0 million
Profit After Tax (PAT): RM2.6 million
Revenue increased by 8.0%, and Profit Before Tax saw a significant 44.9% rise. This growth was primarily driven by a RM5.4 million increase in overseas sales, which successfully offset a RM4.0 million decline in local sales.
Year-to-Date Performance: A Broader Perspective
While the quarterly results are strong, it’s crucial to examine the cumulative performance for the nine months ended 31 March 2025 (9M FY2025) to understand the full picture.
9M FY2025
Revenue: RM49.99 million
Profit Before Tax (PBT): RM9.99 million
Profit After Tax (PAT): RM8.72 million
Basic Earnings Per Share: 0.72 sen
9M FY2024
Revenue: RM39.94 million
Profit Before Tax (PBT): RM30.58 million
Profit After Tax (PAT): RM29.62 million
Basic Earnings Per Share: 2.76 sen
For the nine-month period, revenue grew by 25.2% to RM49.99 million. However, Profit Before Tax saw a significant decline of 67.6%, and Profit After Tax decreased by 70.6%. This notable drop in year-to-date profitability, despite strong operational segment performance, is largely attributable to a substantial “Other operating income” of RM25.8 million recorded in the prior year’s corresponding period (9M FY2024), which was not present in the current period. This suggests a one-off gain contributing to the prior year’s higher base.
Segmental Performance: Diversification in Action
MIKRO MSC BERHAD’s business segments demonstrate varied contributions to the overall revenue:
| Segment | 9M FY2025 Revenue (RM’000) | 9M FY2024 Revenue (RM’000) |
|---|---|---|
| Intelligent Electronic Device | 32,687 | 28,215 |
| Busway | 16,035 | 11,726 |
| Advertising & Signboard | 1,272 | – |
| Total Revenue | 49,994 | 39,941 |
Both the Intelligent Electronic Device and Busway segments showed healthy growth. Notably, the new Advertising & Signboard segment, a result of recent strategic moves, contributed RM1.27 million to revenue, marking a successful entry into a new business area.
Financial Health and Strategic Moves
Borrowings and Capital Commitments
As of 31 March 2025, the Group’s total borrowings stood at RM11.96 million, an increase from RM8.34 million as of 31 March 2024. This increase is mainly due to higher lease liabilities, while flexi loans and term loans saw slight reductions. The company also has a capital commitment of RM3.47 million for new manufacturing equipment, indicating ongoing investment in operational capabilities.
Key Corporate Developments
MIKRO MSC BERHAD has been actively pursuing strategic initiatives to enhance its growth profile:
- TES Productions & Projects Pte Ltd Acquisition: On 14 January 2025, MIKRO completed the acquisition of 100% of TES Productions & Projects Pte Ltd for RM30 million, satisfied through the issuance of 134,831,460 new ordinary shares. This acquisition is pivotal for the company’s diversification.
- Diversification into Signage and Interior Fit-Out: Concurrent with the TES acquisition, MIKRO is diversifying its business to include the design, manufacture, and installation of signs and advertising displays, as well as providing interior fit-out services. This move broadens MIKRO’s market reach and revenue streams.
- Stake in EEHB: MIKRO remains a major shareholder in EEHB, holding a 20.62% stake following EEHB’s listing on the ACE Market of Bursa Malaysia Securities Berhad on 22 August 2024.
Risks and Prospects: Navigating the Future
MIKRO MSC BERHAD acknowledges operating in a competitive market and a challenging global environment. However, the Group remains optimistic about the profitability and viability of its existing business operations in the coming financial year. The strategic diversification into biomass fuel products and the recent acquisition of TES Productions & Projects Pte Ltd underscore the company’s proactive approach to mitigate risks and capitalize on new opportunities.
The successful integration of TES and the new signage and interior fit-out businesses will be key determinants of future growth. The company’s ability to leverage these new segments to generate sustainable revenue will be crucial in the evolving market landscape.
Summary and Outlook
MIKRO MSC BERHAD’s Q3 FY2025 report showcases a company actively executing its growth and diversification strategy. The quarter’s strong financial performance, driven by overseas sales and improved margins, is a positive indicator of operational efficiency. While the year-to-date profitability was impacted by a high base from a one-off gain in the previous year, the underlying operational segments show healthy growth.
The strategic acquisitions and diversification efforts into the signage, interior fit-out, and biomass fuel sectors are clear signals of MIKRO’s ambition to broaden its portfolio and enhance resilience. These initiatives position the company to tap into new markets and revenue streams, potentially offsetting challenges in its traditional segments.
Key points to monitor for MIKRO’s future development include:
- The successful integration and performance of the newly acquired TES Productions & Projects Pte Ltd.
- The revenue and profit contribution from the new signage and interior fit-out businesses.
- The impact of global economic conditions on overseas sales and overall market demand.
- The company’s ability to maintain healthy gross profit margins amidst competitive pressures.
Overall, MIKRO MSC BERHAD appears to be on a strategic path, focusing on expanding its business scope while maintaining a solid core. The coming quarters will be instrumental in observing how these new ventures mature and contribute to the company’s overall financial health.
What are your thoughts on MIKRO MSC BERHAD’s latest quarter? Do you think their diversification strategy into new industries like signage and biomass fuel will yield significant long-term benefits? Share your insights in the comments below!
