Overall Financial Performance: A Mixed Bag of Growth and Headwinds

QL Resources Berhad has concluded its financial year with a commendable increase in full-year revenue and profit. However, the fourth quarter presented a slightly more complex picture, reflecting both sustained growth areas and segments facing seasonal or market-driven pressures.

Quarterly Snapshot (Q4 FY2025 vs. Q4 FY2024)

For the fourth quarter ended March 31, 2025, QLR recorded a 7% increase in revenue year-on-year, reaching RM 1.76 billion. This indicates continued top-line expansion. However, Profit Before Taxation (PBT) saw a marginal 1% decrease, while Profit for the Period and Profit Attributable to Shareholders declined by 2% and 5% respectively. This suggests some margin compression during the quarter, leading to a slight dip in Basic Earnings Per Share to 2.57 sen from 2.71 sen a year ago.

Full Financial Year Performance (FY2025 vs. FY2024)

For the full financial year, QLR demonstrated robust growth. Revenue expanded by 6% to hit RM 7.07 billion, while Operating Profit increased by 4% to RM 989.5 million. PBT saw a healthy 6.3% rise to RM 665.87 million, and Profit for the Period was up 5% to RM 497.06 million. This translated into a 4% increase in Basic Earnings Per Share for the full year, reaching 12.48 sen. This full-year performance paints a picture of underlying strength despite the softer fourth quarter.

Segmental Performance: A Closer Look

QLR’s diversified portfolio means that performance is often driven by different segments. Here’s how each business unit fared:

Marine Products Manufacturing (MPM)

MPM’s Q4 sales saw a marginal 4% increase year-on-year, primarily due to higher fishmeal sales volume. However, PBT declined by 16% due to margin erosion in other activities from weak market sentiment. For the full year, sales were up 1% but PBT decreased by 12%, impacted by weaker fishing, fishmeal, and aquaculture performance.

Integrated Livestock Farming (ILF)

ILF showed strong performance, with Q4 PBT jumping 19% year-on-year despite flat sales. This was largely driven by substantially higher feed raw material trading volume with better margins. Full-year sales increased by 5%, and PBT surged by 16%, thanks to strong feed raw material trading, improved Malaysian layer operations with lower feed costs, and better Indonesian operations.

Convenience Store Chain (CVS)

The CVS segment, primarily FamilyMart, saw an 8% increase in Q4 sales year-on-year, driven by a net increase of 50 stores. However, Q4 PBT decreased by 7% due to higher operating expenses from minimum wage hikes and increased store rentals. Despite this, full-year sales grew by a robust 12%, and PBT increased by 6%, largely attributed to store expansion and improved average store sales, particularly from initial EPF Account 3 withdrawals.

Palm Oil and Clean Energy (POCE)

POCE was a standout performer in terms of sales growth, with Q4 sales soaring 40% year-on-year. This significant increase was primarily due to the consolidation of newly acquired Plus Xnergy Holdings and more solar project deliveries under BM Greentech, alongside better palm oil activity performance driven by substantially higher Crude Palm Oil (CPO) prices. While Q4 PBT was marginally lower due to a disposal gain reported in Q4 FY2024, cumulative PBT for the full year surged by an impressive 50%, reflecting higher project progress and better margins for Bio-energy projects.

Financial Health: Balance Sheet and Cash Flow

A look at the balance sheet as of March 31, 2025, shows QLR’s financial position remains robust. Total Assets increased to RM 5.90 billion from RM 5.48 billion a year ago. Equity attributable to shareholders of the Company grew to RM 3.16 billion from RM 2.94 billion, indicating a strengthening of the company’s net worth. Net Assets per share also improved to RM 0.87 from RM 0.81.

The company’s cash flow statement highlights strong operational cash generation. Net cash generated from operating activities for the full year was RM 908.87 million, up from RM 843.80 million in the previous year. This robust operating cash flow supports the company’s investments and dividend payments. Net cash used in investing activities was RM 289.47 million, reflecting continued capital expenditure, while net cash used in financing activities was RM 347.85 million, which includes significant dividend payments to both shareholders and minority interests, as well as repayment of borrowings.

Risks and Prospects: Navigating the Future

Looking ahead, QL Resources operates in an environment shaped by both global economic trends and domestic policies. Bank Negara Malaysia projects Malaysia’s GDP to grow between 4.5% to 5.5% in 2025, supported by strong domestic demand and government stimulus measures. However, external uncertainties, particularly from potential reciprocal tariffs and tighter trade policies by the United States, pose a downside risk, potentially disrupting investment and spending. Foreign currency volatility also remains a factor.

For QLR specifically, while its core businesses are food-related and generally resilient, they are sensitive to consumer sentiment and government policy changes. A significant upcoming change is the phased rationalization of egg subsidies, effective May 1st and completely removed by August 1st, 2025. This is expected to impact the profitability of the ILF segment, which has been a strong contributor. In response, QLR aims to drive operational efficiency across all segments.

On the positive side, the MPM segment is expected to benefit from low input costs and increased export demand for surimi-based products. The CVS segment plans to continue its aggressive expansion, focusing on underserved areas and introducing more local delicacies to offer value to consumers. Crucially, the POCE segment, through its subsidiary BM Greentech and the recent acquisition of Plus Xnergy, is strategically positioned to capitalize on Malaysia’s National Energy Transition Roadmap (NETR) initiatives, tapping into the growing green energy sector.

The management remains cautiously optimistic, acknowledging continued uncertainty in regional economies but confident in the resilience of its basic food and green energy solutions businesses. Their focus will be on driving operational efficiency and making strategic investments, including in technology, to ensure sustainable growth.

Dividends: Returning Value to Shareholders

In a positive note for shareholders, the Board of Directors has proposed a final single-tier dividend of 2.50 sen per ordinary share for the financial year ended March 31, 2025. This amounts to approximately RM 91.3 million, subject to shareholder approval at the upcoming Annual General Meeting. This reflects the company’s consistent effort to return value to its investors.