Perak Corp Navigates Q2 2025: Operational Gains Amidst Crucial Regularisation Efforts
Greetings, fellow investors and market watchers! Today, we’re diving deep into the latest financial disclosures from Perak Corporation Berhad (PCB), specifically their interim financial report for the second quarter ended 30 June 2025. This quarter presents a fascinating mix of operational resilience and the ongoing critical efforts to address the company’s long-standing financial challenges. While we see encouraging signs of revenue growth and improved performance in key segments, the overarching narrative remains firmly tied to the proposed regularisation plan designed to uplift its PN17 status.
For shareholders and potential stakeholders, the report reveals a significant jump in net profit attributable to owners of the company, highlighting some underlying positive shifts. However, the financial statements continue to be prepared on a non-going concern basis, a stark reminder of the essential work ahead. Let’s break down the numbers and strategic moves shaping PCB’s journey.
Core Data Highlights: A Tale of Mixed Fortunes
Perak Corp’s Q2 2025 results showcase a notable uplift in revenue, largely driven by its core port and logistics segment. Yet, the path to sustained profitability is still being paved, with the company navigating increased operational costs and the complexities of its corporate restructuring.
Group Financial Performance at a Glance
For the quarter ended 30 June 2025, Perak Corp posted a RM43.4 million revenue, an 11% increase compared to RM39.3 million in the corresponding quarter last year. Looking at the cumulative year-to-date figures, revenue rose by 4% to RM80.7 million from RM77.3 million.
Net profit for the financial period, however, saw a slight dip of 7% in the current quarter to RM4.4 million compared to RM4.7 million in Q2 2024. Despite this, the cumulative year-to-date net profit improved by 6% to RM8.0 million.
Perhaps the most striking figure for shareholders is the net profit attributable to owners of the Company, which surged by an impressive 104% in the current quarter to RM0.27 million (from RM0.13 million in Q2 2024), and by 52% year-to-date to RM0.40 million (from RM0.26 million in YTD Q2 2024).
Quarter-on-Quarter (QoQ) Comparison: Momentum Building
Comparing the immediate quarter (Q2 2025) with the preceding quarter (Q1 2025), we observe a positive sequential trend:
Current Quarter (Q2 2025)
Revenue: RM43.4 million (+16% QoQ)
Net Profit: RM4.4 million (+21% QoQ)
Net Profit Attributable to Owners: RM0.27 million (+102% QoQ)
Preceding Quarter (Q1 2025)
Revenue: RM37.3 million
Net Profit: RM3.6 million
Net Profit Attributable to Owners: RM0.13 million
This shows a strong rebound in performance between Q1 and Q2 2025, primarily driven by increased throughput in the port and logistics segment and a reversal of impairment loss on financial guarantee contracts.
Segmental Performance Review
Port & Logistics: The Core Engine
The port & logistics segment continues to be the largest revenue contributor. For Q2 2025, revenue increased by 12% to RM37.9 million compared to RM33.9 million in Q2 2024. Year-to-date, revenue grew by 4% to RM68.8 million. This growth is largely attributed to higher throughput, especially from Lekir Bulk Terminal (LBT), which saw a 35% increase in Q2 2025 throughput year-on-year, compensating for the previous year’s M4 disruption.
However, profit before tax for this segment decreased by 9% in Q2 2025 to RM10.9 million, mainly due to higher staff and maintenance costs. Year-to-date, PBT showed a marginal improvement of 3% to RM19.9 million.
Here’s a snapshot of the Port & Logistics segment:
| Metric | Q2 2025 (RM’000) | Q2 2024 (RM’000) | % Change | YTD Q2 2025 (RM’000) | YTD Q2 2024 (RM’000) | % Change |
|---|---|---|---|---|---|---|
| Revenue | 37,896 | 33,878 | 12% | 68,833 | 65,952 | 4% |
| Profit Before Tax | 10,861 | 11,905 | -9% | 19,928 | 19,391 | 3% |
| LBT Throughput (metric tonnes) | 3,692,018 | 2,736,958 | 35% | 6,333,068 | 5,382,301 | 18% |
| LMT Throughput (metric tonnes) | 1,283,818 | 1,323,588 | -3% | 2,493,718 | 2,316,737 | 8% |
| Total Throughput (metric tonnes) | 4,975,836 | 4,060,546 | 23% | 8,826,786 | 7,699,038 | 15% |
Property Development: Strategic Planning Underway
The property development segment reported no revenue for Q2 2025 as its projects are in the early stages of planning. It recorded a loss before tax of RM0.5 million, attributed to staff costs. Management is actively exploring new opportunities to expand its portfolio in Perak and other states, aiming to position this segment for future sustainable growth, especially with the strategic Silver Valley Technology Park (SVTP) industrial hub in view.
Hospitality & Tourism: Turning the Corner
This segment saw a modest revenue increase to RM5.6 million in Q2 2025 (from RM5.5 million in Q2 2024). Encouragingly, it significantly reduced its pre-tax loss to RM0.3 million (from RM0.6 million in Q2 2024). On a year-to-date basis, this segment turned profitable with a PBT of RM1.3 million (compared to a RM0.4 million loss in YTD Q2 2024), driven by a RM1.3 million gain from lease termination and a RM0.4 million debt waiver.
Hotel Casuarina @ Meru continued to perform well with corporate and MICE activities, while Hotel Casuarina @ Kuala Kangsar maintained stable occupancy supported by group bookings and ongoing facility upgrades.
Management Services and Others: Impairment Reversal Provides Relief
Revenue for this segment remained consistent at RM0.9 million in Q2 2025. The pre-tax loss decreased to RM2.9 million (from RM3.4 million in Q2 2024), mainly due to a RM1.4 million reversal of impairment loss on a financial guarantee contract. However, year-to-date, the pre-tax loss increased to RM6.9 million, primarily due to higher staff costs and administrative expenses.
Risk and Prospect Analysis: Charting the Future
Perak Corp’s Q2 2025 report underscores a period of active strategic maneuvering, balancing operational growth with the imperative of financial restructuring. The company’s future remains inextricably linked to the successful implementation of its Regularisation Plan.
The Critical PN17 Status and Non-Going Concern Basis
It is crucial for all stakeholders to understand that Perak Corp’s financial statements continue to be prepared on a non-going concern basis. This is due to the Group’s current liabilities exceeding its current assets by RM43.6 million (as at 30 June 2025) and its inability to fully settle its RM182.2 million in total loans and borrowings (with RM53.2 million due within one year) with its current cash balance of RM28.1 million and projected cash inflows from ongoing projects. This situation stems from a series of historical events, including the default of a syndicated term loan by a former subsidiary in 2019, subsequent cross defaults, and the company’s declaration as a PN17 entity in February 2020.
The non-going concern basis implies that assets are valued at recoverable amounts (potentially forced sale values) and liabilities are classified as current if settlement is expected within twelve months, without the assumption of normal business operations. The directors view the Group’s ability to continue operations as significantly curtailed until the Regularisation Plan is approved and implemented.
The Proposed Regularisation Plan: A Path to Stability
To address its financial condition and uplift its PN17 status, Perak Corp announced a Proposed Regularisation Plan on 18 February 2025, with the application submitted to Bursa Malaysia on 9 May 2025. This comprehensive plan is designed to strengthen the Group’s financial position, improve cash flow, and ultimately enhance its financial performance. Key components of the plan include:
- Proposed reduction of the issued share capital.
- A proposed joint venture with Perbadanan Kemajuan Negeri Perak (PKNP) for the development of the Silver Valley Technology Park (SVTP) industrial hub.
- Proposed disposals of several parcels of leasehold lands for a total cash consideration of approximately RM98.57 million.
- Proposed settlement of the company’s entitlement from a joint venture agreement for approximately RM40.38 million.
- Proposed issuance of Redeemable Preference Shares Series B (RPS-B) for the settlement of RM39.73 million in outstanding liabilities to scheme creditors.
- Amendments to the company’s constitution to facilitate the RPS-B issuance and revise terms for existing RPS-A1 and RPS-A2.
The success of this plan is paramount for the company’s future and is subject to regulatory approvals. The company intends to use proceeds from land monetisation under this plan to fully redeem the RPS-A1 and RPS-A2 by 30 September 2025, which were granted extensions by CIMB and Affin Islamic Bank respectively.
Industry Trends and Business Outlook
- Port & Logistics: Expected to achieve or slightly exceed revenue and gross profit targets by year-end, driven by strong operational performance in LBT and marine segments. However, rising operating expenses could impact net profit, emphasizing the need for continued focus on operational efficiency and cost competitiveness.
- Property Development: The Malaysian property market is showing signs of stabilization in Q2 2025. While global uncertainties persist, domestic demand, infrastructure development, and industrial corridor investments provide a solid foundation. Perak is emerging as an attractive alternative for industrial investment due to lower land acquisition costs. Perak Corp is focused on unlocking value from the SVTP Industrial Hub and developing premium residential products to support this ecosystem.
- Hospitality & Tourism: The segment maintains a steady trajectory, supported by resilient domestic demand and sustained performance from Hotel Casuarina @ Meru and @ Kuala Kangsar. Strategic partnerships, marketing campaigns, and ongoing enhancement works are expected to drive improved performance in the second half of 2025, further boosted by the “Visit Perak 2024” initiative.
Pending Litigation
An originating summons was filed in January 2025 by several plaintiffs seeking to vary a court order related to the Scheme of Arrangement and set aside the Sanction Order. The company is monitoring the legal proceedings, maintaining that the sanctioned Scheme of Arrangement remains valid. No material financial impact is currently foreseen, but this remains an ongoing matter.
Summary and Outlook
Perak Corporation’s Q2 2025 results present a nuanced picture: a testament to the operational strength of its core segments, particularly Port & Logistics, and a commendable turnaround in Hospitality & Tourism’s year-to-date profitability. The sequential growth from Q1 to Q2 2025 also indicates a positive operational momentum. However, the shadow of its PN17 status and the non-going concern basis of its financial reporting underscores the significant financial vulnerabilities that still need to be resolved.
The future trajectory of Perak Corp hinges critically on the successful execution and regulatory approval of its Proposed Regularisation Plan. This ambitious plan, encompassing capital reduction, strategic land monetisation, and debt settlements, is designed to rebuild the company’s financial foundation and restore its going concern status. While the property market outlook is cautiously optimistic and the port operations remain robust, the company’s ability to navigate these complex restructuring efforts will be the ultimate determinant of its long-term viability and growth.
Key risk points to monitor moving forward include:
- Timely approval and successful implementation of the Proposed Regularisation Plan by Bursa Malaysia and other relevant authorities.
- Ability to generate sufficient cash flows from asset disposals and the SVTP joint venture to redeem the Redeemable Cumulative Preference Shares (RPS-A1 and RPS-A2) and settle other short-term borrowings.
- The outcome of the ongoing legal challenge to the Scheme of Arrangement.
- Management of rising operating expenses, particularly in the Port & Logistics segment, to maintain profitability.
Summary and Outlook
Perak Corporation’s Q2 2025 results present a nuanced picture: a testament to the operational strength of its core segments, particularly Port & Logistics, and a commendable turnaround in Hospitality & Tourism’s year-to-date profitability. The sequential growth from Q1 to Q2 2025 also indicates a positive operational momentum. However, the shadow of its PN17 status and the non-going concern basis of its financial reporting underscores the significant financial vulnerabilities that still need to be resolved.
The future trajectory of Perak Corp hinges critically on the successful execution and regulatory approval of its Proposed Regularisation Plan. This ambitious plan, encompassing capital reduction, strategic land monetisation, and debt settlements, is designed to rebuild the company’s financial foundation and restore its going concern status. While the property market outlook is cautiously optimistic and the port operations remain robust, the company’s ability to navigate these complex restructuring efforts will be the ultimate determinant of its long-term viability and growth.
Key risk points to monitor moving forward include:
- Timely approval and successful implementation of the Proposed Regularisation Plan by Bursa Malaysia and other relevant authorities.
- Ability to generate sufficient cash flows from asset disposals and the SVTP joint venture to redeem the Redeemable Cumulative Preference Shares (RPS-A1 and RPS-A2) and settle other short-term borrowings.
- The outcome of the ongoing legal challenge to the Scheme of Arrangement.
- Management of rising operating expenses, particularly in the Port & Logistics segment, to maintain profitability.
This quarter’s report is a powerful reminder that corporate turnarounds are rarely straightforward. Perak Corp has shown operational improvements, but the heavy lifting on its financial restructuring is still underway.
What are your thoughts on Perak Corp’s latest quarter? Do you believe the Proposed Regularisation Plan is comprehensive enough to address the company’s challenges and set it on a path to sustainable growth? Share your insights and perspectives in the comments section below!
