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CEKD Berhad Q3 FY2025: Steady Revenue Growth Amidst Margin Pressures
CEKD Berhad has just released its financial results for the third quarter ending May 31, 2025. The report reveals a company demonstrating resilience with stable revenue and strong year-to-date growth. However, a closer look shows some challenges with profitability margins in the current quarter, painting a nuanced picture of its performance. Let’s dive into the key numbers and what they mean for the company moving forward.
Core Data Highlights: A Mixed Quarterly Picture
In this latest quarter, CEKD’s performance presents a story of stability. While revenue saw a slight uptick, profitability faced some headwinds, primarily due to rising costs.
Quarterly Performance (Q3 2025 vs Q3 2024)
The company’s top-line revenue remained largely consistent, showing a marginal increase compared to the same period last year. This indicates a stable demand for its products and services.
Q3 FY2025 (Current Quarter)
Revenue: RM 9.13 million
Q3 FY2024 (Same Quarter Last Year)
Revenue: RM 9.07 million
However, when we look at profits, the story shifts slightly. Both pre-tax and net profit saw a small dip. This was mainly driven by a higher cost of sales, which increased from RM 4.35 million to RM 4.81 million, squeezing the gross profit margin.
Q3 FY2025 (Current Quarter)
Profit Before Tax: RM 2.63 million
Net Profit (Attributable to Owners): RM 1.85 million
Earnings Per Share (EPS): 0.95 sen
Q3 FY2024 (Same Quarter Last Year)
Profit Before Tax: RM 2.74 million
Net Profit (Attributable to Owners): RM 1.86 million
Earnings Per Share (EPS): 0.95 sen
Despite the pressure on profits, the company held its Earnings Per Share (EPS) steady at 0.95 sen, matching the previous year’s performance, thanks to well-managed administrative and selling expenses.
Year-to-Date: A Story of Solid Growth
Zooming out to the nine-month period, the picture becomes much brighter. CEKD has demonstrated impressive growth across the board, underscoring its solid underlying performance for the financial year so far.
| Metric (9-Month Period) | FY2025 | FY2024 | Growth |
|---|---|---|---|
| Revenue | RM 28.01 million | RM 26.36 million | +6.3% |
| Profit Before Tax | RM 7.99 million | RM 6.96 million | +14.8% |
| Net Profit (Attributable to Owners) | RM 5.36 million | RM 4.94 million | +8.5% |
| Earnings Per Share (EPS) | 2.75 sen | 2.54 sen | +8.3% |
Financial Health Check: A Stronger Foundation
One of the standout features of this report is the significant improvement in CEKD’s financial position. The company has successfully strengthened its balance sheet, which is crucial for navigating any future economic uncertainties.
Total liabilities have decreased from RM 8.80 million to RM 6.46 million, largely due to the repayment of borrowings. This deleveraging effort has fortified the company’s financial base. Consequently, the company’s equity has grown, and its net assets per share have improved.
Net Assets Per Share increased to RM 0.39 as of 31 May 2025, up from RM 0.37 on 31 August 2024.
Risks and Prospects: Navigating the Path Ahead
While the year-to-date growth is promising, the company must navigate certain challenges. The primary risk highlighted by the quarterly results is margin compression. The increase in cost of sales outpaced revenue growth, indicating pressure from raw material prices or other operational costs. Managing these costs will be key to sustaining profitability.
On the bright side, CEKD’s prospects are supported by strategic initiatives. The company has been actively deploying its IPO proceeds towards acquiring a factory, purchasing new machinery, and upgrading its IT infrastructure. These long-term investments are expected to enhance production capacity, improve efficiency, and drive future growth.
Furthermore, the strengthened balance sheet provides a solid cushion, giving the company the flexibility to seize opportunities and withstand potential market headwinds.
Dividend Update
According to the report, no dividend was declared for the current quarter under review. Investors will be keeping an eye on future announcements as the company continues to generate profit.
Summary and Outlook
In summary, CEKD Berhad’s Q3 FY2025 results present a picture of resilience and strategic progress. The company maintained stable revenue in a challenging quarter and delivered strong growth over the nine-month period. While margin pressure is a key concern, its proactive cost management and strengthened balance sheet are significant positives. The strategic deployment of capital into long-term assets signals a clear focus on future growth and operational excellence.
Looking ahead, here are the key points for investors to monitor:
- Profit Margin Management: The ability of the company to effectively manage its rising cost of sales will be crucial for protecting its bottom line in the upcoming quarters.
- Impact of Capital Investments: The results from the new factory and machinery investments should begin to translate into improved efficiency and higher revenue streams over the medium term.
- Sustaining Growth Momentum: Observers will be watching to see if the robust year-to-date growth can be maintained through the final quarter of the financial year.
From my perspective, CEKD’s Q3 2025 report paints a picture of a company in a transitional phase. The top-line stability and strong year-to-date growth are commendable. The real test will be in its ability to navigate cost pressures and translate its strategic investments into improved profitability.
What are your thoughts on CEKD’s performance? Do you believe their long-term investments will successfully combat the current margin squeeze?
Share your views in the comments below!
For more analysis on companies in the industrial products and services sector, check out our other articles.
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