Apex Healthcare Q2 2025 Results: Resilient Core Business Overshadowed by Associate’s Performance, Rewards Shareholders with Bumper Dividend
Apex Healthcare Berhad has just released its financial results for the second quarter ended June 30, 2025. The report paints a picture of a company with a resilient core business that continues to see steady demand. While top-line revenue shows slight growth, the bottom line has been impacted by challenges within an associated company. Let’s dive into the details.
A key highlight for shareholders is the board’s decision to declare not just an interim dividend, but a special dividend as well, signaling confidence and a commitment to shareholder returns.
Core Data Highlights: A Mixed but Stable Quarter
At a glance, Apex Healthcare’s performance shows stability in its primary operations. The Group’s revenue saw a marginal increase, reflecting the steady demand for its pharmaceutical and healthcare products across key markets.
Group revenue for Q2 2025 edged up by 0.8% to RM 240.8 million, demonstrating resilience in both private and public sector sales.
However, when we look further down the income statement, the story becomes more nuanced. While the core business operations held firm, overall profitability was pulled down by external factors and the performance of its associate.
Q2 2025 (Current Quarter)
Revenue: RM 240.8 million
Profit Before Tax: RM 24.6 million
Net Profit: RM 18.8 million
Earnings Per Share: 2.63 sen
Q2 2024 (Comparative Quarter)
Revenue: RM 238.7 million
Profit Before Tax: RM 29.1 million
Net Profit: RM 23.6 million
Earnings Per Share: 3.31 sen
The 15.4% decline in Profit Before Tax and the 20.4% drop in Net Profit are significant. The report attributes this primarily to the performance of its 40% associate, Straits Apex Group Sdn Bhd (SAG), which registered a share of loss amounting to RM 2.6 million for the quarter, a stark contrast to the RM 1.0 million profit contribution in the same period last year. The company also noted that revenue growth was moderated by the stronger Malaysian Ringgit, which affected the translation of revenue from its Singapore subsidiaries. Furthermore, a slight dip in operating profit was due to higher depreciation charges from new assets acquired in late 2024 to support long-term growth.
Financial Health Check: A Solid Foundation
Despite the dip in profitability, Apex Healthcare’s balance sheet remains robust, indicating strong financial health and stability. Net assets have grown, while total liabilities have decreased since the end of 2024.
| Balance Sheet Item | As at 30 June 2025 | As at 31 Dec 2024 |
|---|---|---|
| Total Assets | RM 1,018.4 million | RM 1,008.9 million |
| Total Liabilities | RM 213.3 million | RM 219.3 million |
| Net Assets | RM 805.1 million | RM 789.6 million |
| Net Assets per Share | RM 1.13 | RM 1.10 |
This solid financial footing, supported by a strong net cash position, provides the Group with the flexibility to navigate market challenges and invest in future growth opportunities.
Risks and Prospects: Cautious Optimism Ahead
Looking forward, the management expresses cautious optimism. The core pharmaceutical manufacturing and distribution businesses are expected to remain resilient, driven by firm demand for healthcare products. The Group’s strategy focuses on new product launches, enhancing digital capabilities, and diversifying its distribution models to sustain growth.
However, the company is not immune to external headwinds. Key risks include mounting global economic uncertainties, potential new trade barriers, and the ongoing volatility of foreign exchange rates. The primary internal challenge remains the turnaround of its associate company, SAG, whose performance is impacted by a slower-than-expected recovery in orders and higher operational expenses from its recent relocation.
Rewarding Shareholders: A Dividend Delight
The Board of Directors has declared an interim single-tier dividend of 3.00 sen per share and a special single-tier dividend of 3.00 sen per share.
This brings the total dividend for the quarter to 6.00 sen per share. Both dividends are scheduled to be paid on 19 September 2025.
Summary and Investment Recommendations
Apex Healthcare’s Q2 2025 results present a dual narrative. On one hand, the core business demonstrates admirable resilience with stable revenue and a strong balance sheet. On the other hand, the Group’s consolidated profits have been significantly weighed down by the losses from its associate, SAG. The generous dividend declaration is a strong signal of the board’s confidence in the company’s long-term stability and cash-generating ability. Investors will be keenly watching for signs of improvement from the associate company in the coming quarters.
Key points to monitor going forward:
- The operational and financial turnaround of the associate company, Straits Apex Group (SAG).
- The impact of foreign currency fluctuations, particularly the strength of the Malaysian Ringgit, on translated earnings.
- Progress on strategic initiatives, including the pipeline of new product launches and their market reception.
- The resilience of healthcare spending amid global economic uncertainties and trade tensions.
Final Thoughts
From a professional standpoint, this report highlights a classic case of a company with a strong core business whose consolidated results are being temporarily obscured by challenges within an associated entity. The resilience of the primary operations and the healthy balance sheet are positive indicators, but the turnaround of the associate company will be a key catalyst for future profit growth.
What are your thoughts on Apex Healthcare’s strategy? Do you believe the core business strength is enough to navigate the challenges from its associate company? Share your views in the comments below!
