EITA Resources: Revenue Soars 14%, But a Quarterly Loss Raises Questions
EITA Resources Berhad just released its latest quarterly report for the period ending June 30, 2025, and it’s a mixed bag that will surely get investors talking. While the company posted an impressive double-digit revenue growth, the bottom line swung into a surprising loss. Let’s dive into the numbers to understand what’s driving this performance and what it might mean for the company’s future.
Despite the challenges, the company declared and paid a first interim dividend of 1.5 sen per share during the period, signalling a degree of confidence from the management about its long-term stability.
Core Data Highlights: A Tale of Two Tapes
At a glance, the headline numbers tell a conflicting story. Revenue growth was strong, but profitability took a significant hit compared to the same quarter last year.
Q3 2025 (Current Quarter)
Revenue: RM 103.35 million
Profit Before Tax: (Loss) RM 1.24 million
Net Profit (Attributable to Owners): (Loss) RM 0.41 million
Earnings Per Share (EPS): (0.14) sen
Q3 2024 (Same Quarter Last Year)
Revenue: RM 90.56 million
Profit Before Tax: RM 4.90 million
Net Profit (Attributable to Owners): RM 4.06 million
Earnings Per Share (EPS): 1.35 sen
The 14.1% year-on-year revenue increase was primarily fuelled by the High Voltage System segment. However, this growth did not translate into profits. The Group recorded a loss before tax, a stark reversal from the profit seen in the same period last year, mainly due to losses in the Manufacturing segment and weaker performance from the Services segment.
Segment Breakdown: A Deeper Look
To understand the Group’s overall performance, we need to look at its individual business units. The High Voltage segment was the star in terms of revenue, but the Manufacturing segment was the primary drag on profitability.
| Segment | Revenue (Q3 2025 vs Q3 2024) | Profit/Loss Before Tax (Q3 2025 vs Q3 2024) | Key Insights |
|---|---|---|---|
| Marketing & Distribution | -2.4% | +3.6% | A stable performance with slightly improved profitability. |
| Manufacturing | -7.2% | -436.1% (Swung to a loss of RM3.0M from a profit of RM0.9M) | The main culprit for the Group’s loss, hit by a significant RM3.6 million net loss on foreign exchange. |
| Services | -0.7% | -33.8% | Profitability declined due to lower revenue from maintenance contracts and higher administrative costs. |
| High Voltage System | +162.6% | -10.3% (Loss widened slightly) | Spectacular revenue growth from project execution, but the segment remains loss-making. |
Financial Health Check
Looking at the balance sheet, the company’s financial position remains solid. Net assets per share increased slightly to RM 0.84 from RM 0.81 at the end of the last financial year. However, the cash flow statement raises a point of caution. For the cumulative nine-month period, the Group experienced a net cash outflow from operating activities of RM5.0 million, a reversal from the RM0.7 million cash inflow generated in the same period last year. This is an area investors will want to monitor closely in the upcoming quarters.
Risk and Prospect Analysis: Navigating Choppy Waters
The external environment presents potential challenges. The report notes the recent announcement by the US government to subject Malaysia’s exports to a 19% tariff rate. While this could impact various industries, EITA’s management has stated that they have not yet observed any adverse impact on their business operations but will remain vigilant.
Looking ahead, the Board remains “cautiously optimistic” about the Group’s performance for the next quarter. This cautious optimism is backed by their current order book and ongoing projects, which are expected to provide a stable foundation for the near future.
Summary and Outlook
EITA Resources’ latest quarter presents a complex picture. The impressive revenue growth, particularly from the High Voltage System segment, demonstrates strong market demand and project execution capabilities. However, this has been overshadowed by a slide into unprofitability, driven by significant foreign exchange losses in the Manufacturing segment and margin pressures elsewhere.
The decision to pay a dividend despite a quarterly loss suggests that management views the current headwinds as manageable and has confidence in the company’s underlying strength. The solid balance sheet provides a buffer, but the negative operating cash flow is a key metric to watch. For future growth to be sustainable, the company must focus on improving profitability and converting its high revenue-generating activities into positive cash flow.
- Profitability Pressure: The key challenge is to turn the High Voltage segment’s revenue growth into profit and mitigate the forex risks in the Manufacturing segment.
- Cash Flow Management: Reversing the negative trend in operating cash flow will be crucial for funding future growth and operations.
- External Risks: The potential impact of US tariffs and global economic shifts remains an uncertainty that the company needs to navigate carefully.
Final Thoughts
From my perspective, this quarter highlights a classic “growth versus profitability” dilemma. The massive top-line expansion in the High Voltage segment is encouraging, but it’s not yet contributing to the bottom line. The forex impact on the Manufacturing segment could be a one-off event, but it underscores a vulnerability in its operations. The key question for investors is whether management can steer the ship towards profitable growth in the coming quarters.
What are your thoughts on EITA’s performance? Do you think the High Voltage segment can become a profitable growth engine for the company? Share your views in the comments below!
