BM Greentech’s Strong Start to FY2026: Revenue Soars 38%, But Is It All Sunshine?
BM Greentech Berhad has just released its financial results for the first quarter ended June 30, 2025, and the numbers paint a picture of robust growth. The company, a key player in Malaysia’s renewable energy sector with divisions in Bio-Energy, Water Treatment, and Solar Energy, reported a significant surge in both revenue and profit. However, a closer look reveals a mixed performance across its segments, presenting both exciting opportunities and potential challenges for investors to watch.
A key highlight for shareholders is the Board’s recommendation of a final single-tier dividend of 2.75 sen per share for the financial year ended 31 March 2025, signaling confidence in the company’s financial health and commitment to shareholder returns.
Financial Performance Highlights: A Strong Year-on-Year Leap
At a macro level, BM Greentech’s performance this quarter has been impressive when compared to the same period last year. The group’s strategic initiatives and growing market demand have translated into solid financial gains across the board.
Q1 FY2026 (ended 30 June 2025)
Revenue: RM 127.7 million
Profit Before Tax: RM 16.0 million
Net Profit: RM 13.2 million
Earnings Per Share (EPS): 1.88 sen
Q1 FY2025 (ended 30 June 2024)
Revenue: RM 92.2 million
Profit Before Tax: RM 12.6 million
Net Profit: RM 8.1 million
Earnings Per Share (EPS): 1.55 sen
The company achieved a remarkable 38% increase in revenue year-on-year, driven primarily by its rapidly expanding Solar Energy segment. This top-line growth fueled a 26% rise in Profit Before Tax (PBT) and a staggering 62.5% jump in Net Profit, showcasing improved profitability and operational efficiency.
Deep Dive into Business Segments
To truly understand the company’s performance, we need to look at the individual contributions of each business unit. The story here is nuanced, with different segments driving growth in different ways.
| Segment | Revenue (Q1’26) | PBT (Q1’26) | Revenue Growth (YoY) | PBT Growth (YoY) |
|---|---|---|---|---|
| Bio-Energy | RM 63.1M | RM 12.2M | -2% | +48% |
| Water Treatment | RM 11.1M | RM 0.9M | +16% | >100% |
| Solar Energy | RM 53.5M | RM 2.9M | >100% | -28% |
Bio-Energy: Profitability Over Revenue
The Bio-Energy segment, the group’s largest revenue contributor, saw a slight 2% dip in revenue due to the timing of project deliveries. However, its Profit Before Tax (PBT) surged by an impressive 48%. This indicates a successful strategy of focusing on higher-margin projects, which more than compensated for the minor revenue decline and other costs like foreign exchange losses.
Water Treatment: Small but Mighty
The Water Treatment division delivered stellar results. With a 16% increase in revenue from higher project deliveries, its PBT more than doubled. This outstanding performance was attributed to securing better-margin projects and effective cost optimisation, highlighting the segment’s operational excellence.
Solar Energy: Explosive Growth with a Caveat
The Solar Energy segment was the star of the show in terms of revenue growth, which more than doubled year-on-year. This was driven by securing and completing more projects, alongside the successful integration of the newly acquired Plus Xnergy Holding Sdn. Bhd. (PXH). However, this explosive growth came at a cost. The segment’s PBT fell by 28%, primarily because the newly consolidated PXH is currently operating at lower margins. Higher provisions for doubtful debts also impacted profitability.
Navigating the Future: Risks and Opportunities
BM Greentech is operating in a dynamic environment shaped by Malaysia’s strong push towards renewable energy. The government’s National Energy Transition Roadmap (NETR) and initiatives like the Corporate Renewable Energy Supply Scheme (CRESS) provide a powerful tailwind for the industry. The growing corporate emphasis on Environmental, Social, and Governance (ESG) principles further fuels demand for green solutions.
However, the path is not without its challenges. The report notes that recent policy shifts, such as the mandatory battery storage requirement under the Self-Consumption (SELCO) scheme and the expiry of the Net Energy Metering (NEM) program, present near-term hurdles for the solar industry. The company is proactively addressing these by exploring new growth areas, including water treatment solutions for data centres and Battery Energy Storage System (BESS) opportunities for various sectors.
Summary and Investment Recommendations
BM Greentech has delivered a strong start to its financial year, marked by significant revenue and net profit growth. The company’s core Bio-Energy and Water Treatment segments are demonstrating excellent profitability, while the Solar Energy division is driving massive top-line expansion. The balance sheet remains healthy, with increasing assets, higher net assets per share (RM0.84), and strong net cash from operations of RM31.7 million. The Board remains cautiously optimistic about delivering satisfactory growth for the year.
For potential and current investors, it is crucial to monitor the following points:
- Solar Segment Profitability: Keep a close eye on whether the company can improve the margins of its newly acquired solar business, PXH, to ensure that revenue growth translates into sustainable profit growth.
- Impact of Policy Changes: Observe how the company navigates the evolving regulatory landscape in Malaysia, particularly the challenges posed by changes to the SELCO and NEM schemes.
- Execution of New Opportunities: Track the progress in new ventures like water treatment for data centres and BESS, as these could become significant future growth drivers.
From a professional standpoint, this report showcases a company in a strong growth phase, skillfully leveraging its established segments for profitability while investing in high-growth areas. The key challenge will be integrating its new solar acquisition effectively and improving its margin profile. The proposed dividend is a positive sign of the management’s confidence in sustained cash flow and future performance.
What are your thoughts on BM Greentech’s performance? Do you believe the Solar segment’s profitability will catch up with its revenue growth in the coming quarters?
Share your views in the comments section below!
