Unpacking XL Holdings Berhad’s Q4 FY2025: Growth Amidst Shifting Sands
Greetings, fellow investors! Today, we’re diving deep into the latest financial revelations from XL Holdings Berhad (XL), a diversified Malaysian company with interests spanning agriculture, food, and aquaculture. Their recently released Fourth Quarter and Full Financial Year 2025 report (ending 30 April 2025) offers a fascinating look at their performance, highlighting impressive top-line growth for the full year, even as they navigate market challenges and strategic shifts. Let’s break down the numbers and see what’s truly driving XL’s trajectory.
Core Financial Highlights: A Tale of Two Periods
Quarterly Performance (Q4 FY2025 vs Q4 FY2024)
The fourth quarter presented a mixed bag for XL Holdings. While the Group continued its operational activities, certain segments faced headwinds, leading to a dip in overall revenue and profitability compared to the same period last year.
Q4 FY2025
Revenue: RM17.93 million
Profit Before Tax (PBT): RM2.88 million
Net Profit: RM2.79 million
Basic Earnings Per Share (sen): 0.63 sen
Q4 FY2024
Revenue: RM20.76 million
Profit Before Tax (PBT): RM3.37 million
Net Profit: RM3.81 million
Basic Earnings Per Share (sen): 1.47 sen
For the quarter, revenue decreased by approximately 13.65%, from RM20.76 million to RM17.93 million. This decline in sales volume, particularly in the Foods segment, impacted the bottom line, with Profit Before Tax (PBT) seeing a 14.43% reduction to RM2.88 million. Net Profit also fell by 26.86% to RM2.79 million. A notable point for retail investors is the significant drop in Basic Earnings Per Share (EPS) from 1.47 sen to 0.63 sen. This substantial decrease is primarily due to the increased number of ordinary shares in issue following various corporate exercises, which we’ll discuss further.
Full Financial Year Performance (FY2025 vs FY2024)
Despite the quarterly dip, XL Holdings delivered a robust full-year performance, demonstrating strong growth across its diversified portfolio.
FY2025
Revenue: RM109.12 million
Profit Before Tax (PBT): RM10.49 million
Net Profit: RM9.99 million
Basic Earnings Per Share (sen): 2.61 sen
FY2024
Revenue: RM70.53 million
Profit Before Tax (PBT): RM6.90 million
Net Profit: RM7.00 million
Basic Earnings Per Share (sen): 2.90 sen
For the full financial year, XL Holdings saw its revenue surge by an impressive 54.71% to RM109.12 million, up from RM70.53 million in the preceding year. This significant top-line growth translated into a healthy increase in profitability, with PBT climbing by 51.98% to RM10.49 million and Net Profit rising by 42.82% to RM9.99 million. However, similar to the quarterly performance, the Basic EPS for the full year slightly decreased from 2.90 sen to 2.61 sen. This seemingly counter-intuitive outcome (higher profit, lower EPS) is a direct result of the substantial increase in the company’s share base due to various corporate exercises, including the conversion of Redeemable Convertible Notes (RCN) and a private placement. This means the larger profit is now distributed among a greater number of shares.
Segmental Performance: The Drivers Behind the Numbers
XL Holdings operates across several key segments. Understanding each segment’s contribution provides a clearer picture of the Group’s overall health and strategic direction.
Investment Holding
The Investment Holding segment recorded consistent gross revenue of RM0.06 million for the quarter and RM0.24 million for the full year. This segment primarily generates income from management fees and investment income. While it registered a loss before tax of RM0.21 million for the quarter (compared to RM0.42 million loss last year) and RM1.27 million for the full year (compared to RM1.15 million loss last year), the quarterly loss improved, mainly due to lower corporate exercise expenses.
Foods Segment
The Foods segment, a significant revenue contributor, experienced a 26.21% decrease in gross revenue for the quarter, falling to RM9.72 million from RM13.17 million. This was mainly attributed to a reduction in sales volume. For the full year, however, this segment showed remarkable growth, with gross revenue soaring by 82.41% to RM80.73 million, driven by higher sales volume of food products. Despite this strong full-year revenue growth, the segment reported a loss before tax of RM0.57 million for the quarter and RM0.36 million for the full year. The continued loss was primarily due to higher unrealised loss on investment in the quarter and the recognition of expenses related to the Employees’ Share Option Scheme (ESOS) and Share Grant Plan (SGP) for the full year.
Fish Farming Segment
The Fish Farming segment saw a positive quarterly performance, with gross revenue increasing by 17.35% to RM1.54 million, thanks to increased sales volume of tropical fishes. However, it registered a loss before tax of RM0.81 million for the quarter, compared to a profit of RM0.39 million in the prior year. This shift was mainly due to a decrease in the fair value of non-current biological assets. For the full year, gross revenue slightly decreased by 0.50% to RM5.38 million, mainly due to a decrease in sales volume of Arowana and Stingray, contributing to a full-year loss before tax of RM2.57 million.
Merchandise Segment
The Merchandise segment recorded a modest 2.29% increase in gross revenue for the quarter to RM3.67 million, driven by higher sales volume of fish food. This segment’s quarterly profit before tax significantly improved to RM0.50 million from RM0.14 million, mainly due to a decrease in impairment of doubtful debts and stock obsolescence. For the full year, gross revenue saw a slight decrease of 0.61% to RM14.66 million, leading to a lower profit before tax of RM1.53 million, primarily due to a decrease in product margin.
Growing Crop Segment
A standout performer, the Growing Crop segment’s gross revenue increased by 10.44% to RM3.81 million for the quarter, and by 22.16% to RM10.48 million for the full year, driven by improved sales of pineapple and suckers. This segment posted a significantly higher profit before tax of RM5.92 million for the quarter and RM16.75 million for the full year. This impressive growth was mainly propelled by a higher fair value gain recognized on biological assets, in line with the increase in plant population.
Other Segment
The Other segment’s gross revenue decreased to RM0.06 million for the quarter but increased to RM1.30 million for the full year, mainly from sales of seaweed, hatchery, and edible bird’s nest businesses. This segment recorded a higher loss before tax for the quarter due to impairment loss on trade receivables related to the bird’s nest business, and a full-year loss before tax of RM3.67 million.
Financial Health: A Stronger Position
XL Holdings’ balance sheet shows a strengthening financial position as at 30 April 2025.
| Financial Metric | As at 30 April 2025 (RM ‘000) | As at 30 April 2024 (RM ‘000) | Change (%) |
|---|---|---|---|
| Total Assets | 211,670 | 189,367 | 11.77% |
| Total Equity | 205,734 | 181,883 | 13.11% |
| Cash and Bank Balances | 28,255 | 9,309 | 203.52% |
| Total Liabilities | 5,936 | 7,484 | -20.68% |
| Net Assets Per Share (RM) | 0.54 | 0.72 | -25.00% |
Total Assets grew by 11.77% to RM211.67 million, while Total Equity attributable to owners of the company increased by 13.11% to RM205.73 million. Notably, cash and bank balances saw a substantial increase of over 200% to RM28.26 million, indicating improved liquidity. Total Liabilities decreased by 20.68% to RM5.94 million, further strengthening the balance sheet. However, Net Assets Per Share (RM) decreased from RM0.72 to RM0.54. This reduction, despite the increase in total equity, is primarily due to the significant increase in the number of ordinary shares outstanding from various corporate exercises completed during the year, such as the conversion of Redeemable Convertible Notes, a private placement, and a bonus issue, diluting the net assets per share.
From a cash flow perspective, the Group generated strong net cash from operating activities of RM10.51 million for the full year, a significant improvement from RM5.96 million in the previous year. This indicates healthy operational cash generation. Net cash used in investing activities saw a substantial reduction to RM1.10 million from RM28.81 million, suggesting a more efficient allocation of capital or fewer large-scale investments compared to the prior year. Net cash generated from financing activities was RM9.54 million, primarily from the issuance of ordinary shares and conversion of RCNs. Overall, the Group’s cash and cash equivalents at the end of the period surged to RM28.26 million, up from RM9.31 million.
Risks and Prospects: Navigating the Future
XL Holdings remains optimistic about its diversified portfolio, outlining clear strategies for future growth and addressing potential challenges.
In the **agriculture division**, the company is strengthening its sales team to expand product availability across Malaysian supermarkets. Furthermore, there are plans to pursue export opportunities once production capacity expands, signaling ambition for wider market reach. The **food trading segment** is anticipated to experience steady growth, buoyed by the rising consumer demand for ready-to-eat products.
For the **aquaculture division**, XL Holdings will concentrate on improving operational efficiency and optimizing the fish farming segment. The company also expects positive profit growth this year, a forecast bolstered by the recent launch of its hatchery operations and a new venture into seaweed farming. These new initiatives could provide fresh revenue streams and enhance the segment’s profitability.
However, it’s important to note the inherent risks. The report highlights that the Group’s operations can be affected by seasonal or cyclical factors, particularly the “fish productivity level affected by adverse weather.” Additionally, the “Other segment” faced an impairment loss on trade receivables related to the bird’s nest business due to long-outstanding balances, indicating potential credit risk in certain ventures.
Despite these challenges, XL Holdings is confident in its ability to enhance operations and achieve sustainable financial performance through these strategic initiatives.
Summary and Investment Recommendations
XL Holdings Berhad has demonstrated a strong full-year revenue and profit growth in FY2025, driven by robust performance in its Foods and Growing Crop segments. The company’s balance sheet has also strengthened considerably, with a significant increase in cash reserves and a reduction in total liabilities, indicating improved financial health and liquidity. While the fourth quarter saw a dip in performance and a notable dilution in Earnings Per Share due to extensive corporate exercises, the underlying operational improvements and strategic expansion plans paint a positive picture for the future.
Key points to consider from this report include:
- **Strong Full-Year Growth:** Impressive revenue growth of 54.71% and PBT growth of 51.98% for the full financial year.
- **Dilution Impact:** The significant increase in share capital from RCN conversions, private placement, and bonus issues has diluted EPS and Net Assets Per Share, despite higher absolute profits and equity.
- **Strategic Expansion:** The company is actively pursuing growth by strengthening its sales team, exploring export markets, and
