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Harn Len’s Stellar Finish to FY2025: A Deep Dive into Record Profits and Future Outlook
Harn Len Corporation Bhd has just released its fourth-quarter report for the financial year ended 31 May 2025, and the numbers are nothing short of impressive. The plantation-focused company not only posted a massive surge in profitability but also rewarded its shareholders with a generous dividend declaration. This report marks a significant turnaround from the previous year, shifting from a loss-making position to one of robust health. Let’s break down the key figures and what they mean for the company’s future.
The standout news is the full-year profit attributable to owners, which soared to RM33.4 million, a dramatic reversal from the RM3.6 million loss recorded in the previous year. This performance was capped by an exceptionally strong fourth quarter.
A Spectacular Quarter Caps a Turnaround Year
The final quarter of FY2025 was a blockbuster for Harn Len. The company’s revenue and profits saw explosive growth compared to the same period last year. This surge was driven by a combination of strong operational performance in its core plantation business and a significant one-off gain.
Q4 FY2025 (Current Quarter)
- Revenue: RM 70.9 million
- Profit Before Tax: RM 26.6 million
- Net Profit: RM 21.8 million
- Basic Earnings Per Share (EPS): 3.68 sen
Q4 FY2024 (Comparative Quarter)
- Revenue: RM 50.9 million
- Profit Before Tax: RM 1.7 million
- Net Profit: RM 0.8 million
- Basic Earnings Per Share (EPS): 0.27 sen
The phenomenal jump in pre-tax profit was largely fueled by a RM24.3 million gain on the disposal of an investment property. However, even without this one-off item, the underlying business showed remarkable strength.
Plantation Powerhouse: The Core Engine Roars
The plantation segment, which accounts for 99% of the Group’s revenue, was the primary driver of this success. Performance was boosted by higher production of Fresh Fruit Bunches (FFB) and increased sales volumes of Crude Palm Oil (CPO) and Palm Kernel (PK), all at more favourable prices.
| Metric | FY2025 | FY2024 | Change |
|---|---|---|---|
| CPO Sold (MT) | 50,933 | 38,052 | +33.9% |
| PK Sold (MT) | 10,707 | 8,998 | +19.0% |
| Average CPO Price (RM/MT) | 4,125 | 3,714 | +11.1% |
| Average PK Price (RM/MT) | 2,668 | 1,825 | +46.2% |
This data clearly shows that Harn Len benefited from both producing more and selling at higher prices, a powerful combination that significantly enhanced its profitability.
New Ventures and Strategic Moves
Harn Len is not just relying on its traditional business. The company recently completed the acquisition of Tiger Aquaculture Sdn Bhd, marking its entry into shrimp farming. This new segment recorded a small operating loss for the period, attributed to delays from a prolonged monsoon season. This strategic diversification aims to create new revenue streams for the future.
Meanwhile, the property segment’s major contribution came from the aforementioned disposal of an investment property, a strategic move that unlocked significant value and bolstered the company’s cash position.
Navigating the Tides: Risks and Future Outlook
Looking ahead, Harn Len’s management appears cautiously optimistic. The outlook for CPO prices is stable, with expectations for prices to remain above RM4,000 per metric tonne, supported by strong demand from key markets like India and movements in related edible oil prices. The company plans to continue its focus on operational efficiency and cost rationalisation to navigate market uncertainties.
However, risks remain. The palm oil industry is inherently exposed to price volatility influenced by global economic conditions and geopolitical events. Furthermore, the company is still dealing with a long-standing legal case related to Native Customary Rights (NCR) land in Sarawak. While the High Court ruled in the company’s favour with a nominal damages award, the claimants have filed an appeal, meaning the issue is not yet fully resolved.
Summary and Outlook
Harn Len has delivered an outstanding financial year, marked by a strong operational turnaround in its core plantation business and a significant boost from a strategic asset disposal. The company’s balance sheet has strengthened, and its move to reward shareholders with a total dividend of 4.50 sen per share for the year is a sign of confidence. The diversification into aquaculture is a forward-looking step, though its success is yet to be proven.
As an investor, it’s important to consider the following points when looking at the company’s future:
- Core Business Momentum: The plantation segment’s performance is fundamental. Monitoring FFB production and CPO price trends will remain crucial.
- Impact of One-Off Gains: A substantial portion of the record Q4 profit came from a property sale. This should be factored in when forecasting future, more normalized, earnings.
- Diversification Success: The new aquaculture venture is in its infancy. Its ability to overcome initial hurdles and contribute meaningfully to the bottom line will be a key story to watch in the coming year.
- Commodity Price Dependency: Despite diversification efforts, the company’s fortunes remain closely tied to the volatile CPO market.
- Ongoing Litigation: The appeal in the NCR land case represents a lingering uncertainty that investors should be aware of, even if the immediate financial risk appears low based on the High Court’s decision.
My Take
Harn Len’s FY2025 report showcases a company executing well in its core business while making strategic moves for long-term growth. The underlying operational improvement is solid, even when stripping out the one-off gain. The key challenge ahead will be to successfully integrate and grow its new aquaculture business to create a more resilient and diversified earnings base, reducing its reliance on the cyclical palm oil industry.
What are your thoughts on Harn Len’s diversification into aquaculture? Do you see it as a smart long-term move to weather the cycles of the plantation industry? Share your insights in the comments below!
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