LB Aluminium Berhad: A Full-Year Profit Surge Amidst Shifting Sands
Malaysian market watchers, buckle up! LB Aluminium Berhad (LBALUM) has just unveiled its financial results for the fourth quarter and full financial year ended 30 April 2025. While the final quarter presented a mix of challenges and triumphs, the full-year performance paints a picture of robust growth, primarily driven by its thriving property segment. This report not only highlights an impressive surge in full-year profit but also signals the company’s commitment to shareholder returns with a consistent dividend announcement.
Let’s dive into the numbers and uncover the story behind LBALUM’s latest financial journey.
Core Data Highlights: A Tale of Two Quarters, A Strong Year
Overall Performance: Navigating Mixed Currents
The fourth quarter of the financial year 2025 saw LB Aluminium Berhad’s revenue decline slightly, but a significant jump in profit before taxation (PBT) and net profit. However, when we look at the full financial year, the picture is one of impressive growth across the board.
4Q2025 (Current Quarter)
- Revenue: RM250.59 million
- Profit Before Taxation (PBT): RM21.90 million
- Net Profit: RM12.80 million
- Earnings Per Share (EPS): 1.65 sen
4Q2024 (Previous Year’s Corresponding Quarter)
- Revenue: RM273.57 million
- Profit Before Taxation (PBT): RM16.59 million
- Net Profit: RM9.38 million
- Earnings Per Share (EPS): 2.17 sen
For the quarter, revenue saw an 8.4% decrease. However, PBT surged by 32.0%, and net profit increased by a healthy 36.5%. It’s worth noting that while overall net profit rose, the Earnings Per Share (EPS) for owners of the company saw a decline. This is largely due to a substantial increase in profit attributable to non-controlling interests, indicating strong performance from certain consolidated entities.
FY2025 (Full Financial Year)
- Revenue: RM1,064.23 million
- Profit Before Taxation (PBT): RM85.69 million
- Net Profit: RM59.34 million
- Earnings Per Share (EPS): 8.35 sen
FY2024 (Previous Financial Year)
- Revenue: RM955.52 million
- Profit Before Taxation (PBT): RM50.57 million
- Net Profit: RM36.56 million
- Earnings Per Share (EPS): 6.73 sen
Looking at the full financial year, the results are unequivocally positive. Revenue grew by 11.4% to cross the RM1 billion mark. PBT saw a remarkable 69.5% increase, while net profit jumped by 62.3%. This strong full-year performance highlights the company’s resilience and strategic execution over the past year.
Diving Deeper: Segmental Insights
LBALUM operates primarily through two segments: Aluminium and Property. Their individual performances offer a clearer understanding of the group’s overall trajectory.
Aluminium Segment
In the fourth quarter, the Aluminium segment’s revenue decreased by 7.6% to RM166.01 million, primarily due to lower sales volume. Consequently, its PBT fell by 42.2% to RM8.59 million, impacted by lower revenue, reduced margins, and a smaller reversal of impairment losses on trade receivables compared to the previous year.
However, for the full financial year, the Aluminium segment demonstrated growth, with revenue increasing by 8.0% to RM703.90 million. This was driven by both higher sales volume and an improved average selling price. Despite the revenue growth, the segment’s full-year PBT saw a slight decrease of 2.1% to RM31.95 million. This was largely due to impairment losses on trade receivables and significant foreign exchange losses incurred during the year, contrasting with foreign exchange gains in the prior year.
Property Segment
The Property segment was the standout performer. In the fourth quarter, despite a 9.9% dip in revenue to RM84.58 million, its PBT soared by an astounding 667.2% to RM13.31 million. This remarkable increase was attributed to higher contributions from its property projects, aligning with greater cumulative sales and work progress.
For the full financial year, the Property segment’s revenue grew by 18.7% to RM360.33 million. More impressively, its PBT skyrocketed by 199.8% to RM53.74 million, propelled by strong contributions from its existing development projects in Bandar Tasik Selatan, including SASaR, PSV 1 Residences, and PSV 2 Residences.
Financial Health Check: Balance Sheet & Cash Flow
As of 30 April 2025, LBALUM’s financial position remains robust. Total assets expanded to RM1,083.73 million from RM908.44 million a year ago, reflecting the company’s growth. Total equity also increased to RM462.95 million, boosting net assets per share to RM1.00 from RM0.94.
However, a closer look at the cash flow statement reveals some shifts. Net cash generated from operating activities for the full year saw a significant decrease to RM18.03 million, compared to RM53.39 million in the prior year. This was mainly influenced by increased property development expenditure and changes in contract assets. Despite this, the company managed its investing activities more efficiently, with net cash used in investing activities decreasing to RM18.44 million from RM38.02 million, largely due to lower capital expenditure on property, plant, and equipment. Overall, cash and cash equivalents at year-end stood at RM34.46 million, a decrease from RM44.88 million in the previous year.
Risk and Prospect Analysis: Navigating the Future
LBALUM acknowledges the prevailing economic uncertainties but remains cautiously optimistic about its future. The global economy, while showing moderate growth, faces headwinds from escalating trade tensions and high policy uncertainty, as highlighted by the International Monetary Fund’s revised global growth projections.
Domestically, Malaysia’s economy demonstrated resilience with 4.4% growth in the first quarter of 2025, supported by household spending and a stable labor market. However, Bank Negara Malaysia also anticipates a lower GDP growth rate for 2025 amidst global uncertainties.
Aluminium Segment’s Balancing Act
For the Aluminium segment, global aluminium price fluctuations and geopolitical tensions are increasing input costs for raw materials like aluminium billet. This presents a challenge to maintaining margins. Nevertheless, the stabilization of the US Dollar against the Malaysian Ringgit is a positive development, as LBALUM’s export sales are primarily priced in USD. The company plans to remain vigilant, closely monitor operational costs, and adjust selling prices as necessary to preserve profitability.
Property Segment’s Solid Foundation
The Property segment continues to be a strong contributor. Its ongoing projects, including Satu Anggota Satu Rumah (SASaR), PSV 1 Residences, and PSV 2 Residences, are progressing well with high cumulative sales and work completion rates:
| Projects | Cumulative Sales (%) | Cumulative Work Progress (%) |
|---|---|---|
| SASaR | 99.9% | 93.4% |
| PSV 1 Residences | 84.2% | 82.2% |
| PSV 2 Residences | 13.7% | 28.7% |
These projects are expected to continue contributing positively to the Group’s performance as sales and work progress advance.
Barring unforeseen circumstances, the Board is “cautiously optimistic” about the Group’s profitability for the forthcoming quarter.
Summary and Outlook
Summary and Investment Recommendations
LB Aluminium Berhad has delivered a commendable financial performance for the full financial year ended 30 April 2025, marked by substantial growth in revenue and profit. The Property segment has been a key driver of this success, showcasing robust contributions from its ongoing development projects. While the Aluminium segment faces challenges from fluctuating raw material prices and foreign exchange impacts, the company’s proactive approach to cost management and pricing adjustments is crucial.
The Board’s cautious optimism for the upcoming quarter reflects a realistic view of the market environment, balancing global economic uncertainties with the strong pipeline of its property developments. The consistent dividend recommendation also signals confidence in the company’s financial health and its commitment to returning value to shareholders.
Key points to consider:
- **Property Segment’s Resilience:** The continued strong performance and high sales/work progress of property projects are critical for sustained profitability.
- **Aluminium Segment’s Margins:** Monitoring global aluminium prices, managing input costs, and effective pricing strategies will be vital for the Aluminium segment to improve its contribution.
- **Cash Flow Management:** While overall assets and equity grew, the significant decrease in operating cash flow warrants close attention to ensure liquidity and funding for future projects.
- **Macroeconomic Headwinds:** Global trade tensions and policy uncertainties could impact demand and costs, requiring agile responses from the company.
Final Thoughts
From a professional standpoint, LB Aluminium Berhad’s latest report demonstrates a strategic pivot towards leveraging its property development arm, which has clearly paid off in the last financial year. The company’s ability to achieve significant profit growth despite a challenging global economic backdrop and a mixed quarterly performance from its core aluminium business highlights its adaptability. The consistent dividend recommendation further underscores management’s confidence in the underlying business fundamentals.
However, the Aluminium segment’s profitability remains sensitive to external factors like commodity prices and currency fluctuations. The slight dip in overall cash and cash equivalents at year-end, driven by operational cash flow, will be an area to watch. LBALUM’s ability to maintain its growth momentum will hinge on the continued success of its property projects and its strategic cost and pricing management within the aluminium division.
What are your thoughts on LBALUM’s strategy to navigate these varied market conditions? Share your insights in the comments below!
