Notion Vtec’s Q3 FY2025 Results: Navigating a Tough Quarter Amidst Cumulative Growth
Notion Vtec Berhad, a key player in high-precision metal manufacturing, has just released its financial results for the third quarter ended June 30, 2025. The report paints a mixed picture: while the company faced significant headwinds this quarter, swinging from a healthy profit to a loss compared to the same period last year, its year-to-date performance still shows top-line growth. Let’s dive into the details to understand the forces at play and what lies ahead for the company.
Core Data Highlights
A Challenging Quarter Contrasts with Year-to-Date Resilience
The most striking aspect of this report is the sharp downturn in the third quarter’s performance when compared year-on-year. The company reported a net loss, a stark reversal from the substantial profit recorded in Q3 FY2024. This was primarily driven by a 15.6% drop in revenue and compressed margins.
In Q3 FY2025, Notion Vtec recorded a net loss of RM0.9 million, a significant decline from the RM20.0 million profit in the same quarter last year.
The report attributes this quarterly slump to a combination of factors, including lower contributions from key segments, the weakening of the US Dollar, initial setup costs for new products, and higher overall production costs.
Q3 FY2025 (Current Quarter)
Revenue: RM 114.4 million
Profit Before Tax: (RM 1.7 million)
Net Profit/(Loss): (RM 0.9 million)
Basic EPS (sen): (0.18)
Q3 FY2024 (Same Quarter, Last Year)
Revenue: RM 135.5 million
Profit Before Tax: RM 24.0 million
Net Profit/(Loss): RM 20.0 million
Basic EPS (sen): 3.90
Despite the quarterly setback, the cumulative nine-month performance shows a 4.7% increase in revenue to RM356.7 million. However, profitability for this longer period has also been impacted, with net profit down 59.2% to RM17.1 million.
Segment Performance Breakdown
A closer look at the business segments reveals a varied performance. The Electronic Manufacturing Services (EMS) segment, the largest revenue contributor, faced the strongest headwinds with a 28% decline in revenue. The Automotive segment also saw a 16% drop. In contrast, the Hard Disk Drive (HDD) segment remained remarkably stable, showing great resilience.
| Business Segment | Q3 FY2025 Revenue (RM’000) | Q3 FY2024 Revenue (RM’000) | Change (%) |
|---|---|---|---|
| EMS | 40,168 | 55,629 | -28% |
| Automotive | 24,601 | 29,237 | -16% |
| HDD | 38,235 | 38,563 | -1% |
| Camera/Industrial | 11,375 | 12,056 | -6% |
The decline in EMS revenue is attributed to heightened market challenges, including softer consumer sentiment on high-ticket items and stiff competition. The Automotive segment’s performance normalized after earlier front-loading activities by clients in response to US tariff concerns.
Financial Health Snapshot
The company’s balance sheet remains solid. Net Assets Per Share attributable to owners of the company saw a slight improvement, increasing to 82.91 sen as of June 30, 2025, from 80.33 sen at the end of the last financial year. While cash and bank balances decreased, this was largely due to significant investments in property, plant, and equipment (RM57.7 million), signaling a commitment to future capacity and growth.
Risk and Prospect Analysis
Navigating Headwinds and Seizing Opportunities
Looking ahead, Notion Vtec is navigating a complex environment filled with both challenges and opportunities. The management has provided a clear view of the landscape.
On the opportunity front, the HDD segment is a clear bright spot, expected to sustain steady growth driven by the booming global demand for data storage, particularly from AI-related applications. Furthermore, the company has successfully secured several new Automotive accounts, with the economic benefits expected to materialize as production ramps up. In the EMS segment, efforts are underway to expand the product portfolio through targeted sales initiatives.
However, risks remain. The Automotive segment could be affected by external factors like US tariffs, technological shifts, and intense competition from China’s excess capacity. The broader market is also facing headwinds from a subdued US Dollar, which could impact performance. The company is mitigating this through selective short-term foreign exchange hedging. On the trade front, while Malaysia has successfully negotiated a reduction in US tariffs from 25% to 19%, the unresolved US-China and US-EU trade discussions continue to cast a shadow of uncertainty.
Barring unforeseen circumstances, the Board expects the Group’s diversified revenue to remain sustainable for FY2025 and is on track to deliver resilient profitability amidst these market conditions.
Summary and Outlook
Notion Vtec’s third-quarter results reflect a period of significant short-term pressure, primarily from margin compression and revenue decline in its EMS and Automotive segments. The swing to a net loss is a key point for investors to note. However, the stability of the HDD segment, coupled with strategic wins in new automotive accounts, provides a foundation for future performance. The company’s balance sheet remains healthy, and its continued investment in assets underscores a long-term growth strategy.
While the path ahead contains challenges, the management’s outlook remains cautiously optimistic, focusing on achieving a resilient full-year performance. Key risk factors to monitor include:
- Persistent weakness in the Automotive and EMS segments due to market competition and softer consumer demand.
- Negative impacts from foreign currency fluctuations, particularly a subdued US Dollar.
- Ongoing uncertainty from global trade tensions and tariffs that could affect key export markets.
- Execution risk in ramping up production for new clients and successfully expanding the EMS product portfolio.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Investors should conduct their own due diligence before making any investment decisions.
