PT Resources Holdings Berhad: Navigating Growth and Margin Pressures in FY2025 Q4
Hello fellow investors and market watchers! Today, we’re diving deep into the latest financial pulse of PT Resources Holdings Berhad (PTRH), a prominent player in the seafood processing and trading sector. Their unaudited interim financial report for the fourth quarter ended 30 April 2025 has just been released, and it paints a picture of resilient revenue growth amidst evolving market dynamics and profitability challenges.
While the company has demonstrated a notable increase in revenue, particularly in the latest quarter, the report also highlights a significant compression in profit margins. This signals a strategic shift in their sales mix and pricing approach to maintain competitiveness. On a brighter note, the company continues its strategic diversification efforts, including a new venture into coconut processing, and has announced a second interim single-tier dividend, reflecting its commitment to shareholder returns.
Let’s break down the key figures and insights from this report to understand what’s truly shaping PTRH’s performance.
Core Data Highlights: A Closer Look at the Numbers
Quarterly Performance: 4QFY2025 vs. 4QFY2024
PTRH’s latest quarter saw a commendable increase in sales, driven by local initiatives and a renewed focus on expanding domestic sales channels. However, this growth came at a cost to profitability.
4QFY2025
Revenue: RM172.5 million
Gross Profit: RM18.9 million
Gross Profit Margin: 10.9%
Profit Before Tax (PBT): RM4.2 million
Earnings Per Share (EPS): 0.76 sen
4QFY2024
Revenue: RM146.5 million
Gross Profit: RM29.8 million
Gross Profit Margin: 20.3%
Profit Before Tax (PBT): RM14.4 million
Earnings Per Share (EPS): 2.82 sen
Analysis: Revenue climbed by RM26.0 million or 17.8%, partly due to successful campaigns like the Umrah trip sponsorship. However, Gross Profit saw a significant drop of 36.6% (RM10.9 million), with the GP margin shrinking by 9.4 percentage points. This was primarily attributed to a higher contribution from lower-margin seafood products that require minimal processing, coupled with strategic pricing to stay competitive. Administrative expenses, on the other hand, were well-managed, decreasing by 19.6% due to cost optimization efforts and reduced advertising.
Full-Year Performance: FY2025 vs. FY2024
Looking at the cumulative performance for the financial year, PTRH maintained stable revenue but faced similar challenges in profitability as seen in the quarterly results.
YTD FY2025
Revenue: RM558.6 million
Gross Profit: RM49.4 million
Gross Profit Margin: 8.8%
Profit Before Tax (PBT): RM12.0 million
Earnings Per Share (EPS): 2.17 sen
YTD FY2024
Revenue: RM554.8 million
Gross Profit: RM84.4 million
Gross Profit Margin: 15.2%
Profit Before Tax (PBT): RM53.0 million
Earnings Per Share (EPS): 9.90 sen
Analysis: Full-year revenue saw a slight increase of 0.7%, indicating consistent demand. However, Gross Profit for the year decreased substantially by 41.6% (RM35.0 million), with the GP margin falling by 6.4 percentage points, echoing the reasons from the quarterly performance. Administrative expenses were reduced by 7.2%, mainly due to lower overseas sales activities. Consequently, the full-year PBT declined significantly.
Quarter-on-Quarter Comparison: 4QFY2025 vs. 3QFY2025
Comparing the current quarter to the immediate preceding one reveals an encouraging rebound in both revenue and gross profit.
4QFY2025
Revenue: RM172.5 million
Gross Profit: RM18.9 million
Gross Profit Margin: 10.9%
Profit Before Tax (PBT): RM4.2 million
3QFY2025
Revenue: RM129.4 million
Gross Profit: RM4.7 million
Gross Profit Margin: 3.7%
Profit Before Tax (PBT): RM1.0 million
Analysis: Revenue surged by 33.3% from the previous quarter, largely driven by a RM40.5 million increase in overseas sales, particularly from major customers in the Middle East. Gross Profit also saw a significant improvement of 298.4%, with the margin rising by 7.2 percentage points, thanks to stronger demand for higher-value products and a more favorable product mix. While administrative expenses increased due to higher selling and distribution costs linked to overseas sales and an unrealized foreign exchange loss, the Group still managed to post an improved PBT.
Segmental Revenue Breakdown
Understanding where the revenue comes from helps us appreciate the company’s business focus.
Revenue by Business Segments (RM’000)
| Business Segment | 4QFY2025 | 4QFY2024 | YTD FY2025 | YTD FY2024 |
|---|---|---|---|---|
| Processing & Trading of Frozen & Dried Seafood Products | 162,125 | 138,945 | 521,203 | 525,629 |
| Trading of Other Products | 10,360 | 7,520 | 37,375 | 29,217 |
| Total | 172,485 | 146,465 | 558,578 | 554,846 |
Revenue by Geographical Location (RM’000)
| Geographical Location | 4QFY2025 | 4QFY2024 | YTD FY2025 | YTD FY2024 |
|---|---|---|---|---|
| Malaysia | 99,894 | 76,041 | 328,258 | 277,882 |
| Overseas (Saudi Arabia) | 32,272 | 7,464 | 41,083 | 29,882 |
| Overseas (China) | 36,447 | 61,379 | 176,548 | 235,442 |
| Overseas (Others) | 3,872 | 1,581 | 12,689 | 11,640 |
| Total | 172,485 | 146,465 | 558,578 | 554,846 |
Analysis: The core business of processing and trading frozen and dried seafood products remains the primary revenue driver. Notably, Malaysia’s contribution to revenue has grown significantly, reflecting the success of local sales initiatives. Overseas sales show a mixed bag, with strong growth in Saudi Arabia for the quarter, but a full-year decline in China, while other overseas markets show steady growth.
Financial Position: A Snapshot of Health (As at 30 April 2025)
A healthy balance sheet is crucial for long-term sustainability.
As at 30.04.2025
Total Assets: RM371.9 million
Total Equity: RM208.8 million
Net Assets Per Share: RM0.39
Cash & Bank Balances: RM71.4 million
Total Borrowings: RM140.8 million
As at 30.04.2024
Total Assets: RM350.1 million
Total Equity: RM203.5 million
Net Assets Per Share: RM0.38
Cash & Bank Balances: RM51.2 million
Total Borrowings: RM114.1 million
Analysis: Total assets increased by 6.2% and total equity by 2.6%, leading to a slight increase in net assets per share. The company’s cash and bank balances also saw a healthy rise, improving its liquidity position. However, total borrowings have increased, indicating reliance on debt for operations or expansion.
Cash Flow: Where the Money Goes (YTD FY2025 vs. YTD FY2024)
Cash flow provides insight into how the company generates and uses cash.
YTD FY2025
Net Cash from Operating Activities: RM34.8 million
Net Cash Used in Investing Activities: RM9.2 million
Net Cash Used in Financing Activities: RM9.3 million
Net Increase in Cash & Cash Equivalents: RM16.3 million
Cash & Cash Equivalents at End of Period: RM72.7 million
YTD FY2024
Net Cash from Operating Activities: RM27.3 million
Net Cash Used in Investing Activities: RM21.1 million
Net Cash Used in Financing Activities: RM14.6 million
Net Increase in Cash & Cash Equivalents: RM8.4 million (decrease)
Cash & Cash Equivalents at End of Period: RM57.1 million
Analysis: PTRH generated more cash from operations, a positive sign of operational efficiency. While cash used in investing activities decreased (primarily due to less property, plant, and equipment purchases), cash used in financing activities also reduced, partly due to a net positive movement in fixed deposits pledged. This resulted in a significant net increase in cash and cash equivalents, strengthening the company’s financial liquidity.
Risks and Prospects: Charting the Future
PTRH acknowledges the challenging global macroeconomic environment but remains committed to its growth trajectory.
The company continues to strengthen its global presence by actively participating in high-impact seafood exhibitions in strategic markets like the United Arab Emirates and China. This has boosted brand visibility and opened up new export opportunities. The long-term demand for quality protein and value-added seafood products remains robust, driven by changing consumer lifestyles and increasing demand for convenience foods.
A significant strategic move is the establishment of a new coconut processing facility in China under Fujian HJS International Holdings Co., Ltd. This diversification effort aims to capitalize on the surging demand for coconut-based products in China, fueled by rising health consciousness and interest in plant-based diets. The increasing popularity of coconut milk in coffee chains and as a dairy alternative signals strong market potential. This new venture is expected to contribute positively to future revenue streams and enhance earnings resilience.
PTRH is also proactively exploring strategic investments, partnerships, and acquisition opportunities that align with its long-term vision of enhancing shareholder value, strengthening market position, and supporting sustainable growth across its core and adjacent businesses.
Summary and Investment Recommendations
PT Resources Holdings Berhad’s latest quarterly report showcases a company actively navigating a complex market. While revenue growth is encouraging, especially the rebound in the latest quarter driven by overseas sales, the pressure on gross profit margins due to product mix and competitive pricing is a key area to monitor. The management’s focus on cost optimization and strategic initiatives like the Umrah trip sponsorship campaign demonstrates their agility in driving local sales.
The strategic diversification into coconut processing in China is a forward-looking move that could provide new growth avenues and enhance the company’s resilience, leveraging a growing market trend. Their commitment to exploring new investments and partnerships also bodes well for future expansion.
However, investors should be mindful of the following key points:
- The persistent compression of gross profit margins, which impacted overall profitability for the financial year.
- The increase in total borrowings, which warrants attention in terms of debt management.
- The ongoing global macroeconomic headwinds, including geopolitical tensions and trade policies, which could affect international trade flows.
The company’s ability to sustain revenue growth, improve profit margins through a more favorable product mix, and successfully integrate its new ventures will be crucial for its future performance. Please note that this analysis is for informational purposes only and does not constitute any buy or sell recommendations or investment advice.
Your Thoughts?
PTRH is clearly adapting to market conditions and making strategic moves. Do you think their diversification into coconut processing will be a game-changer for their earnings resilience? What are your views on their ability to improve profit margins in the coming quarters?
Share your insights and perspectives in the comments section below! Let’s discuss.
