SBH Marine Holdings Berhad: Navigating Growth Amidst Global Headwinds in Q1 FY2025
Greetings, fellow investors! Today, we’re diving deep into the latest financial performance of SBH Marine Holdings Berhad, a prominent player in Malaysia’s seafood industry. Their First Quarter FY2025 report, ended 31 March 2025, has just landed, and it paints a picture of growth, strategic ambition, and resilience in the face of ongoing global challenges. The company has demonstrated a commendable increase in both revenue and profit before tax, even as the market grapples with uncertainties. What’s particularly noteworthy is the previously declared interim dividend, a testament to their commitment to shareholder returns. Let’s unwrap the numbers and see what’s truly driving SBH Marine forward.
Q1 FY2025: A Look at the Numbers
SBH Marine kicked off its financial year with a robust performance. The Group reported a significant uplift in its top-line figures, driven primarily by strong export demand. Here’s a quick snapshot:
Q1 FY2025
Revenue: RM47.69 million
Profit Before Tax (PBT): RM1.62 million
Profit After Tax (PAT): RM1.17 million
Basic Earnings Per Share: 0.13 sen
Q1 FY2024 (Same Period Last Year)
Revenue: RM40.52 million
Profit Before Tax (PBT): RM1.14 million
Profit After Tax (PAT): RM0.97 million
Basic Earnings Per Share: 0.14 sen
Revenue Growth: Compared to the same period last year, revenue surged by 17.7%, from RM40.52 million to RM47.69 million. This impressive growth was largely fueled by higher exports of processed seafood products, particularly to key markets like China and Korea.
Profitability Boost: Profit Before Tax (PBT) saw an even more substantial increase of 42.13%, climbing from RM1.14 million to RM1.62 million. This improvement was attributed to a higher gross profit margin, a recovery in aquaculture performance at the Group’s Kurau and Selinsing farms, and surprisingly, lower selling and distribution expenses due to reduced sea freight rates.
Profit After Tax (PAT): The Group’s PAT also improved, rising to RM1.17 million from RM0.97 million in the corresponding quarter last year, a 20.6% increase.
Earnings Per Share (EPS): Despite the increase in profit, basic earnings per share slightly decreased from 0.14 sen to 0.13 sen. This is primarily due to a higher weighted average number of ordinary shares in issue in the current period (888 million shares in Q1 FY2025 compared to 680 million shares in Q1 FY2024).
A Look Back: Comparison with the Immediate Preceding Quarter (Q4 FY2024)
While the year-on-year performance is strong, it’s also insightful to compare Q1 FY2025 with the immediate preceding quarter, Q4 FY2024:
- Revenue: Revenue in Q1 FY2025 declined by RM6.11 million, or 11.36%, compared to Q4 FY2024 (RM53.80 million). This dip was mainly due to lower contributions from the merchant trading segment (reduced trade order volumes) and the frozen seafood processing segment (lower raw material supply from local third-party aquaculture farms).
- Profit Before Tax (PBT): PBT also saw a decrease of RM5.82 million from RM7.44 million in Q4 FY2024. However, it’s important to note that the higher PBT in Q4 FY2024 included a one-off re-measurement gain of RM11.46 million from the revaluation of a joint venture equity interest, which partially offset an additional provision for expected credit losses. Excluding this exceptional gain, the underlying performance remains positive.
Segmental Performance: Who’s Driving the Growth?
SBH Marine operates across several key segments. Here’s how each contributed to the overall revenue and profit before tax in Q1 FY2025 compared to Q1 FY2024:
| Segment | Revenue (Q1 FY2025, RM’000) | Revenue (Q1 FY2024, RM’000) | PBT (Q1 FY2025, RM’000) | PBT (Q1 FY2024, RM’000) |
|---|---|---|---|---|
| Processing & Sale of Frozen Seafood Products | 36,070 | 24,140 | 300 | 346 |
| Merchant Trading of Frozen Processed Seafood Products | 10,996 | 15,683 | 64 | 278 |
| Aquaculture Related Activities | 6,016 (Inter-segment) | 2,562 (Inter-segment) | 1,090 | 36 |
| Distribution & Trading of Aquaculture Related Products | 622 | 694 | 224 | 107 |
| Others | – | – | (65) | 370 |
| Total External Revenue | 47,688 | 40,517 | 1,615 | 1,137 |
The Processing and Sale of Frozen Seafood Products segment was the largest contributor to external revenue, showing strong growth. The Aquaculture Related Activities segment, while primarily inter-segmental in revenue, showed a remarkable surge in profit before tax, indicating improved farm performance. The Merchant Trading segment, however, saw a decline in both revenue and PBT, reflecting the lower trade order volumes mentioned earlier.
Financial Health and Cash Flow
As of 31 March 2025, SBH Marine’s total assets stood at RM143.51 million, with total equity at RM129.34 million. The net assets per share attributable to owners of the Company remained stable at RM0.14.
From a cash flow perspective, the Group generated RM1.95 million in net cash from operating activities in Q1 FY2025. This was a decrease from RM7.29 million in the same period last year, partly due to changes in working capital. The Group’s cash and cash equivalents at the end of the period were RM50.01 million.
It’s also worth noting the utilisation of IPO proceeds. The company is actively deploying funds for key strategic initiatives:
- Development of Selinsing Farm: RM2.98 million utilised out of RM16 million proposed.
- Construction of a new seafood processing plant: No utilisation yet out of RM6.5 million proposed.
- Purchase of machineries/equipment and motor vehicles: RM0.18 million utilised out of RM6.1 million proposed.
- Working capital requirements: RM6.96 million utilised out of RM7 million proposed.
These investments are crucial for the company’s long-term growth and operational efficiency.
Risks and Future Prospects: Navigating the Tides
SBH Marine acknowledges the global market uncertainties that continue to shape the economic landscape. Key challenges include:
- Trade Tariffs: The imposition of trade tariffs continues to create economic uncertainties and instabilities globally. While the US has initiated talks to reduce tariffs, the outcome remains unpredictable.
- Red Sea Crisis: The ongoing disruptions in global shipping routes due to the Red Sea crisis have led to increased freight rates, impacting operational costs. However, the company anticipates an improvement in this situation by the second half of 2025.
Despite these headwinds, the Group remains confident in its strategic plans. Their key initiatives include:
- Market Expansion: A strong focus on expanding their presence, particularly in China and the Middle East, to diversify and strengthen their market reach.
- Selinsing Farm Development: The development of the Selinsing farm is progressing well, with 49 shrimp ponds completed (up from 43 last quarter) and more under construction. This expansion is expected to significantly boost the contribution from their aquaculture division in the current financial year.
Given these factors, the Board of Directors maintains a cautiously optimistic outlook for the Group’s performance for the financial year ending 31 December 2025.
Dividends: Returning Value to Shareholders
While no new dividend was declared for the current quarter under review, it’s important to remember that the Company declared a single-tier interim dividend of 0.5 sen per ordinary share for the financial year ended 31 December 2024, amounting to RM4.44 million. This dividend was paid on 23 January 2025, demonstrating the company’s commitment to providing returns to its shareholders.
Summary and
SBH Marine Holdings Berhad’s Q1 FY2025 report showcases a company that is not only growing its top and bottom lines but also strategically investing in its future. The strong revenue and profit before tax growth, driven by export demand and improved aquaculture performance, are positive indicators. The company is actively addressing challenges by diversifying its supply chain and expanding its farm operations, which should enhance its operational resilience.
While the global economic environment presents its share of challenges, SBH Marine’s proactive approach to market expansion and farm development positions it to potentially mitigate these risks and capitalise on future opportunities. The commitment to returning value to shareholders through dividends is also a reassuring sign.
Key points to consider moving forward:
- The impact of ongoing trade tariffs and the Red Sea crisis on future freight rates and market demand.
- The successful execution and contribution of the expanded Selinsing farm to the aquaculture segment’s profitability.
- The company’s ability to diversify its raw material supply to mitigate future fluctuations in the frozen seafood processing segment.
From a professional standpoint, this report highlights SBH Marine’s ability to adapt and grow in a dynamic industry. Their focus on high-growth export markets and vertical integration through aquaculture development seems like a sound strategy. However, the global macroeconomic environment, particularly trade policies and logistical costs, will remain crucial factors to monitor.
What are your thoughts on SBH Marine’s latest performance? Do you believe the company can maintain this growth momentum and successfully navigate the global headwinds in the coming quarters? Share your insights in the comments section below!
