Ever wondered how a long-standing Malaysian company navigates challenging economic waters? Today, we’re diving into the latest unaudited financial results for the third quarter ended 31 March 2025 from FACB INDUSTRIES INCORPORATED BERHAD, a prominent player in Malaysia’s bedding industry.
This report offers a candid look at a quarter and a cumulative nine-month period marked by declining revenue and profit. However, it also highlights the strategic moves the company is making to adapt to the current economic climate. Let’s break down the numbers and understand what they mean for FACB’s future.
Key Takeaway: FACB Industries faced a challenging quarter and year-to-date, with both revenue and profit experiencing declines. Yet, the company is actively implementing a direct-to-consumer retail strategy to bolster future sales and brand presence.
Overall Financial Performance: A Challenging Period
The third quarter of the financial year 2025 proved to be a tough one for FACB, with significant decreases across key financial metrics when compared to the same period last year. The cumulative nine-month performance also reflects these headwinds.
Third Quarter Performance (31 March 2025 vs 31 March 2024)
Current Quarter (31/03/2025)
Revenue: RM8.98 million
Profit Before Tax (PBT): RM2.05 million
Net Profit for the Period: RM1.70 million
Earnings Per Share (EPS): 1.88 sen
Comparative Quarter (31/03/2024)
Revenue: RM11.69 million
Profit Before Tax (PBT): RM2.35 million
Net Profit for the Period: RM1.84 million
Earnings Per Share (EPS): 1.89 sen
The company’s revenue saw a notable decrease of 23% quarter-on-quarter, while Profit Before Tax (PBT) declined by 13%. This was primarily attributed to lower revenue from the bedding operation in Malaysia.
Nine-Month Cumulative Performance (31 March 2025 vs 31 March 2024)
Current Period (9 Months Ended 31/03/2025)
Revenue: RM25.77 million
Profit Before Tax (PBT): RM4.21 million
Net Profit for the Period: RM3.27 million
Earnings Per Share (EPS): 3.56 sen
Comparative Period (9 Months Ended 31/03/2024)
Revenue: RM36.43 million
Profit Before Tax (PBT): RM6.44 million
Net Profit for the Period: RM4.93 million
Earnings Per Share (EPS): 5.15 sen
For the cumulative nine months, revenue dropped by 29%, and PBT saw an even steeper decline of 35%. This prolonged dip indicates a persistent challenge in consumer sales and market conditions.
Diving Deeper: Segment Performance
To understand the overall performance, let’s examine the contributions from FACB’s key business segments.
Malaysian Bedding Operations
The core bedding operation in Malaysia bore the brunt of the slowdown:
- Quarter-on-Quarter: Revenue decreased from RM11.38 million to RM8.76 million, and PBT fell by 44% from RM1.15 million to RM0.65 million. This was mainly due to lower consumer sales.
- Nine-Month Cumulative: Revenue dropped by 30% from RM35.17 million to RM24.76 million. PBT saw a significant decline from RM2.70 million to RM0.73 million, attributed to lower revenue and a higher sales mix of lower gross profit margin products.
Associates in China
FACB’s associates in China also faced challenges:
- Quarter-on-Quarter: Net profit contributed to FACB decreased from RM0.44 million to RM0.29 million.
- Nine-Month Cumulative: Net profit contributed decreased from RM1.25 million to RM0.98 million.
These declines were primarily due to lower operating margins in China. It’s also worth noting that Dreamland Shanghai Pte. Ltd., a 40% owned associate, was deregistered on 8 February 2025 as its joint venture tenure expired.
Quarter-on-Quarter Snapshot: A Glimmer of Improvement?
While the year-on-year comparisons show a decline, a look at the immediate preceding quarter (Q2 2025, ended 31 December 2024) offers a slightly different picture for the current quarter (Q3 2025):
Current Quarter (31/03/2025)
Revenue: RM8.98 million
Profit Before Tax (PBT): RM2.05 million
Immediate Preceding Quarter (31/12/2024)
Revenue: RM8.25 million
Profit Before Tax (PBT): RM1.42 million
Revenue increased by 9%, and PBT surged by 44% compared to the immediate preceding quarter. This improvement was largely driven by higher consumer sales and better profit margins from the Malaysian bedding operations, suggesting some recovery or seasonal strength. However, the associates in China still recorded lower net profit compared to the immediate preceding quarter.
Financial Health Check: Balance Sheet & Cash Flow
Let’s briefly look at FACB’s financial position as of 31 March 2025, compared to 30 June 2024:
| Metric | 31/03/2025 (RM’000) | 30/06/2024 (RM’000) |
|---|---|---|
| Total Assets | 240,951 | 243,901 |
| Total Equity | 233,294 | 234,062 |
| Total Liabilities | 7,657 | 9,839 |
| Net Assets Per Share (RM) | 2.60 | 2.60 |
| Cash and Bank Balances | 148,685 | 160,948 |
The company maintains a strong balance sheet with substantial cash and bank balances, although there has been a slight decrease in overall assets and cash since June 2024. Total liabilities also decreased, indicating good financial management.
From a cash flow perspective for the nine-month period, FACB recorded net cash used in operating activities of RM5.09 million, a significant increase from RM0.71 million in the comparative period last year. Net cash from investing activities was RM4.66 million, lower than RM10.52 million previously. Net cash used in financing activities was RM2.48 million. Overall, this resulted in a net decrease in cash and cash equivalents of RM2.91 million for the period, compared to an increase of RM7.50 million in the prior year.
Risks and Prospects: Navigating the Headwinds
FACB acknowledges that the financial year ending 30 June 2025 is expected to remain challenging. The primary concerns stem from broader economic factors:
- Higher Cost of Living: This directly impacts consumer spending power, a crucial driver for the bedding industry.
- Sluggish Global Economy: Global economic uncertainties, including the ongoing US reciprocal tariff threat, contribute to a cautious business environment.
Despite these challenges, FACB is not standing still. The company has initiated a proactive strategy to improve its market position:
- Direct Retail Outlets: By setting up its own retail outlets, FACB aims to reach consumers directly. This move can help build stronger brand awareness and potentially improve sales margins by cutting out intermediaries.
This strategic pivot indicates the company’s commitment to adapting to changing market dynamics and directly engaging with its customer base.
Summary and
FACB Industries Incorporated Berhad’s third-quarter and nine-month results for 2025 reflect a challenging operating environment, characterized by declining revenue and profit. The core Malaysian bedding operations and contributions from China associates both experienced headwinds, largely due to softer consumer demand and lower operating margins.
However, it’s encouraging to see a quarter-on-quarter improvement in revenue and PBT for the Malaysian bedding segment, suggesting potential stabilization or positive impact from recent efforts. The company also maintains a healthy balance sheet with substantial cash reserves, providing a buffer against market volatilities.
Looking ahead, the company acknowledges the persistent challenges posed by the higher cost of living and a sluggish global economy. In response, FACB is strategically expanding its direct retail presence, a move that could be crucial for brand building and sales growth in a competitive market. While the immediate outlook remains cautious, the proactive measures taken by the management highlight their commitment to long-term sustainability.
Please note: This analysis is for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.
Key points to monitor for FACB’s future performance include:
- The effectiveness and consumer reception of their new direct retail outlets.
- The impact of global economic conditions and consumer spending trends on the bedding market.
- Any improvements in operating margins from both Malaysian and international operations.
From an objective standpoint, FACB Industries is navigating a period of significant market pressures. Their decision to establish direct retail outlets is a strategic and necessary step to regain momentum and connect more closely with their customer base. This move could be a game-changer if executed effectively, allowing them to control their brand narrative and potentially improve profitability.
Do you believe FACB’s new retail strategy will be enough to counter the ongoing economic headwinds and drive future growth? Share your thoughts in the comments below!
For more insights into Malaysian companies and market trends, be sure to check out our other articles:
- [Link to Related Article 1]
- [Link to Related Article 2]
