Cahya Mata’s H1 2025 Results: Navigating Forex Headwinds with a Resilient Core
Cahya Mata Sarawak Berhad, a cornerstone of Sarawak’s economy and a diversified multinational conglomerate, has released its financial results for the first half of 2025. The report reveals a challenging period marked by external pressures, most notably significant foreign exchange movements. However, a closer look reveals a company with a robust financial foundation and strategic initiatives poised to drive future growth. Let’s dive into the key takeaways from their latest report.
Despite a challenging first half, Cahya Mata maintains a very strong financial position with a low gearing ratio of just 0.07 times and a healthy cash reserve of RM543.80 million, demonstrating significant resilience.
Core Financial Performance: A Tale of Two Stories
At first glance, the headline numbers show a decline. The Group’s revenue for the first six months of 2025 (PE2025) stood at RM493.05 million, an 11% decrease from the same period last year. Profit Before Tax (PBT) saw a more substantial drop to RM21.01 million from RM107.55 million in PE2024.
However, the story is more nuanced. A major factor impacting profitability was an unrealised foreign exchange (forex) loss of RM34.17 million within its Phosphates business unit, caused by the strengthening of the Malaysian Ringgit against the US Dollar. If we normalise the results by excluding this non-cash item, the PBT for the period would be a more stable RM55.18 million. This highlights that while external market forces created headwinds, the underlying business operations are managing the current climate.
Quarterly Snapshot: Q2 2025 vs Q2 2024
The second quarter reflects the broader half-year trend, with forex losses significantly impacting the bottom line compared to the same quarter last year.
Q2 2025 (Current Quarter)
Revenue: RM246.92 million
Profit Before Tax (PBT): (RM5.86 million)
Profit Attributable to Owners: (RM11.32 million)
Q2 2024 (Comparative Quarter)
Revenue: RM277.98 million
Profit Before Tax (PBT): RM50.30 million
Profit Attributable to Owners: RM33.37 million
Performance Across Business Segments
The Group’s diversified portfolio showed mixed results, with some segments demonstrating strong growth while others faced market-specific challenges.
| Business Unit | H1 2025 Performance Summary | Key Drivers |
|---|---|---|
| Road Maintenance | A standout performer with revenue up 40% and PBT up 32% year-on-year. | Higher volume of ongoing orders and work completions. |
| Cement | Revenue and PBT saw a slight dip of 3%. | Slow progress on key infrastructure projects and adverse weather conditions. |
| Oiltools | Experienced a significant downturn with revenue down 50% and PBT down 77%. | Reduced rig activities across most of its markets. |
| Phosphates | Recorded a higher loss before tax of RM87.19 million. | Primarily due to the significant unrealised forex losses from the weakening USD. |
Risks, Prospects, and Strategic Moves
Cahya Mata is not just weathering the storm; it is actively positioning itself for a stronger second half of the year and beyond. The management has outlined several key developments that are expected to positively impact earnings.
Opportunities on the Horizon
- New Mega Project: The Group has secured a RM550 million contract for the development of the Borneo Convention Centre Kuching II, which has already commenced and is expected to be a key earnings contributor.
- Capacity Expansion: Construction has begun on the Mambong Clinker Line 2, a strategic move to bolster its core Cement business for future demand.
- Phosphates Plant Commissioning: The commissioning of the Cahya Mata Phosphates Industries’ plant is on track to resume in Q4 2025, which could turn a major cost centre into a future revenue driver.
- Favourable Conditions: Management anticipates improved weather in the second half of the year, which will allow for a resumption of construction activities and positively impact its related business segments.
Acknowledged Risks
The primary risk remains market volatility. The significant impact of currency fluctuations on the Phosphates SBU underscores the Group’s exposure to global forex markets. Furthermore, softer demand in key sectors like construction and oil & gas continues to pose a challenge that the company is navigating through strategic project acquisition and operational efficiency.
Summary and Investment Recommendations
Cahya Mata’s first half of 2025 was a clear demonstration of resilience in the face of significant external pressures. While the headline profit figures were heavily impacted by non-cash forex losses, the company’s strong balance sheet, very low gearing, and healthy cash position provide a solid foundation to navigate uncertainty. The standout performance of the Road Maintenance division shows underlying operational strength.
Looking ahead, the company has several powerful catalysts for growth. The new Borneo Convention Centre project, the expansion of its cement production line, and the upcoming commissioning of the phosphates plant are all strategic initiatives designed to drive long
