Eksons Corporation’s Q1 2025 Results: A Tale of Two Divisions Amidst Market Headwinds
Eksons Corporation Berhad has released its financial results for the first quarter ended June 30, 2025, painting a challenging picture with a significant drop in revenue and a swing from profit to loss. This report comes at a time when its core businesses, plywood and property development, are facing distinctly different market dynamics.
Despite the headline loss, a deeper dive reveals a company with a solid balance sheet, no borrowings, and positive developments in its property segment. Let’s break down the numbers and what they mean for the company moving forward.
Core Data Highlights: A Challenging Quarter
The first quarter saw a stark contrast to the same period last year, primarily driven by a sharp decline in revenue from the property development division.
Revenue (Q1 2025)
RM 1.36 million
Revenue (Q1 2024)
RM 3.97 million
The Group’s revenue plummeted by 66% year-on-year. This was largely due to the property development segment, which recorded significantly lower sales compared to a stronger performance in the corresponding quarter of the previous year.
Profit/Loss Before Tax (Q1 2025)
RM 4.61 million Loss
Profit/Loss Before Tax (Q1 2024)
RM 1.41 million Profit
The shift in revenue directly impacted the bottom line, turning a pre-tax profit into a substantial loss. This was further compounded by high operating expenses, including an unrealised foreign exchange loss of nearly RM 11.9 million during the quarter.
Net Profit/Loss (Q1 2025)
RM 4.67 million Loss
Net Profit/Loss (Q1 2024)
RM 1.37 million Profit
Earnings Per Share (Q1 2025)
(2.84) sen Loss
Earnings Per Share (Q1 2024)
0.84 sen Profit
A Closer Look at Business Segments
The overall performance masks the diverging paths of Eksons’ two main divisions.
| Segment | Revenue (Q1 2025) | Profit/Loss After Tax (Q1 2025) | Commentary |
|---|---|---|---|
| Plywood Business | RM 1.1 million | (RM 1.2 million) | Revenue was primarily from local sales. The division continues to face a globally weak market, leading to a persistent loss similar to the previous year. |
| Property Development | RM 0.3 million | RM 0.3 million | Revenue, mainly from car park operations at The Atmosphere, saw a significant drop from last year’s higher property sales. However, the segment remained profitable. |
Financial Health Check: Strong Foundations
Despite the operational loss, Eksons’ financial position remains robust. The company’s balance sheet is healthy with a Net Asset per share of RM 2.28. Crucially, the Group has zero borrowings, insulating it from rising interest rate pressures.
Furthermore, Eksons generated a positive net cash flow from operating activities amounting to RM 2.61 million for the quarter. Its cash and cash equivalents increased to RM 45.47 million, showcasing prudent financial management.
Risks and Prospects: Navigating a Tough Market
The company’s outlook is a blend of caution and optimism.
Plywood Risks: The global market for plywood remains weak, suppressed by US sanctions/tariffs, the ongoing Russia-Ukraine conflict, and economic uncertainty in China. The company will focus on selling its existing inventory in this challenging environment.
Property Prospects: There is a silver lining in the property development segment. The Atmosphere Commercial Park is experiencing a gradual increase in footfall, thanks to the new MRT station at Putra Permai. The recent handover of keys at the adjacent Meta City development is expected to further boost traffic, which bodes well for future sales activities and the viability of its commercial properties.
Summary and Outlook
Eksons Corporation’s first quarter of 2025 was undoubtedly challenging, defined by a steep revenue decline and a swing to a net loss. This was primarily driven by lower contributions from the property segment compared to the previous year and significant unrealised forex losses.
However, the company’s fundamental strength should not be overlooked. It maintains a debt-free balance sheet, generated positive operating cash flow, and holds a healthy cash position. The key risk remains the external pressure on its plywood business, while the primary opportunity lies in capitalizing on the growing vibrancy of its property assets at The Atmosphere.
- Persistent Weakness in Global Plywood Market: The division’s profitability is heavily dependent on global economic conditions that are currently unfavourable.
- Property Market Cycles: Future growth relies on the property segment, which is inherently cyclical and subject to market sentiment.
- Foreign Exchange Volatility: As seen this quarter, currency fluctuations can have a material impact on the company’s profitability.
