ITMAX System Berhad Kicks Off FY2025 with Strong Q1 Performance: A Deep Dive into the Latest Financials

Greetings, fellow investors! Today, we’re diving into the latest financial performance of ITMAX System Berhad, a prominent player in Malaysia’s smart city solutions landscape. Their unaudited condensed consolidated interim financial report for the first quarter ended 31 March 2025 (Q1 2025) has just landed, and it reveals a company that continues to expand its footprint and deliver growth, albeit navigating some evolving market dynamics.

The headline? ITMAX has posted a commendable increase in both revenue and profit before tax compared to the same period last year, largely propelled by its burgeoning digital infrastructure solutions. This signals a robust start to their financial year, setting a positive tone for what’s ahead. Let’s unpack the numbers and see what’s truly driving this performance.

Q1 2025 Financial Highlights: Growth in Key Areas

ITMAX System Berhad’s Q1 2025 results demonstrate solid year-on-year growth across key financial metrics. Here’s a snapshot of their performance:

The Group’s revenue saw a significant increase of 10.66%, climbing from RM45.84 million in Q1 2024 to RM50.73 million in Q1 2025. This positive momentum flowed through to the bottom line, with Profit Before Tax (PBT) expanding by 16.35%, reaching RM27.34 million from RM23.50 million in the previous year’s corresponding quarter. Consequently, profit for the financial period grew to RM20.68 million, up from RM17.90 million.

Revenue Stream Performance: Digital Infrastructure Leads the Way

A closer look at the revenue breakdown reveals the strategic shift and success in ITMAX’s core business:

The surge in revenue is primarily attributed to the robust performance of their Digital Infrastructure Solutions, which saw an impressive 64.23% increase. This segment, encompassing video surveillance, analytics, and subscription services, is clearly the growth engine for ITMAX. While other revenue streams like supply, installation, and maintenance services, trading revenue, and lease revenue experienced declines, the significant growth in digital infrastructure solutions more than compensated, driving the overall positive top-line performance.

Comparison to Immediate Preceding Quarter (Q4 2024)

When comparing Q1 2025 to the immediate preceding quarter (Q4 2024), we see a slight dip:

Revenue decreased by 19.65% from RM63.13 million in Q4 2024 to RM50.73 million in Q1 2025. However, the Profit Before Tax (PBT) only saw a marginal decline of 1.99%. This resilience in profitability, despite lower revenue, is attributed to the completion of certain supply and installation projects in the previous quarter and a higher recognition of revenue from the more profitable digital infrastructure solutions projects in Q1 2025. This indicates a shift towards higher-margin services, which is a positive sign for profitability.

Financial Health and Cash Flow

ITMAX’s balance sheet remains healthy. As of 31 March 2025, total assets stood at RM512.49 million, a slight increase from RM505.76 million at the end of 2024. Total equity also grew to RM418.31 million from RM401.47 million, reflecting the quarter’s profits. Net assets per share attributable to owners improved to RM0.41 from RM0.39.

However, the cash flow statement shows that the Group recorded net cash used in operating activities of RM11.94 million for Q1 2025, compared to net cash from operations of RM4.86 million in Q1 2024. This was primarily due to changes in working capital, particularly a significant increase in trade and other receivables and contract assets. Despite this, the company’s cash and cash equivalents stood at RM120.75 million at the end of the quarter. The Group also continued to manage its debt, with loans and borrowings decreasing to RM37.25 million from RM42.01 million at the end of 2024, including a repayment of RM5.54 million in Q1 2025.

Risks and Future Prospects: Navigating the Macro Landscape

Looking ahead, ITMAX System Berhad is charting an ambitious course for continued expansion. The Group aims to sustain its growth trajectory by broadening its service offerings and exploring new geographical territories and market segments. This strategic direction aligns with the increasing demand for smart city solutions and digital infrastructure, both locally and potentially regionally.

However, the company acknowledges the prevailing global and local economic headwinds. Inflationary pressures remain a significant threat, potentially impacting operational costs and consumer spending power. Despite these challenges, the Board of Directors maintains a cautiously optimistic outlook regarding the Group’s future prospects. Their focus remains on diligently delivering ongoing projects while simultaneously laying the groundwork for mid- and long-term growth initiatives.

IPO Proceeds Utilisation Update

As of the reporting date, ITMAX has utilized a significant portion of its IPO proceeds, with RM171.72 million (84.22%) of the total RM203.89 million already deployed. The remaining RM32.17 million (15.78%) is allocated for various strategic initiatives, including smart city application expansion, R&D capabilities, enterprise market expansion, and network and telecommunication infrastructure expansion. It’s worth noting that the timeframe for utilising the remaining working capital proceeds was extended to 24 months from the listing date, providing flexibility for strategic deployment.

What are your thoughts on ITMAX System Berhad’s Q1 2025 performance? Do you believe their focus on digital infrastructure solutions will continue to be the primary growth driver? Share your insights in the comments section below!

For more in-depth analyses of Malaysian companies, stay tuned to our blog for future updates and reports.