Greetings, fellow investors and tech enthusiasts!
Today, we’re diving deep into the latest financial performance of FSBM Holdings Berhad, a company that has been a significant player in Malaysia’s technology landscape since its inception in 1984. The recently released unaudited condensed consolidated financial statements for the second quarter ended 30 June 2025 offer a comprehensive look at the Group’s operational and financial health.
This report presents a mixed picture: while there’s a notable uptick in revenue for the quarter, the Group also recorded a loss. This prompts us to analyze the underlying factors, explore the performance of its key business units, and understand the strategies FSBM is employing to navigate the dynamic market conditions and position itself for future growth. Let’s unpackage the details and see what this quarter tells us about FSBM’s journey ahead.
Q2 2025 Financial Snapshot: A Mixed Bag
FSBM Holdings Berhad reported an increase in revenue for the second quarter of 2025, a positive sign of operational activity. However, this growth was overshadowed by a shift from profit to loss compared to the same period last year. Let’s look at the key figures:
Individual Period (3 Months Ended 30 June)
Q2 2025
Revenue: RM3,560,000
Gross Profit: RM979,000
Operating (Loss)/Profit: (RM754,000)
(Loss)/Profit Before Tax: (RM781,000)
(Loss)/Profit for the Period: (RM781,000)
Basic (Loss)/Earning per Share: (0.15) sen
Q2 2024
Revenue: RM3,448,000
Gross Profit: RM1,632,000
Operating (Loss)/Profit: RM181,000
(Loss)/Profit Before Tax: RM180,000
(Loss)/Profit for the Period: RM216,000
Basic (Loss)/Earning per Share: 0.04 sen
For the second quarter, revenue saw a modest increase of 3% to RM3.56 million from RM3.45 million in the previous year’s corresponding quarter. This was primarily driven by the Intelligent Application and Digital Solutions segments. However, gross profit declined by 40% to RM0.98 million, largely due to a higher cost of sales. Consequently, the Group recorded an operating loss of RM0.75 million, a significant reversal from the RM0.18 million profit in Q2 2024. This led to a substantial loss before tax of RM0.78 million for the quarter, compared to a profit of RM0.18 million previously.
Cumulative Period (6 Months Ended 30 June)
6 Months 2025
Revenue: RM5,345,000
Gross Profit: RM1,983,000
Operating (Loss)/Profit: (RM1,498,000)
(Loss)/Profit Before Tax: (RM1,553,000)
(Loss)/Profit for the Period: (RM1,553,000)
Basic (Loss)/Earning per Share: (0.28) sen
6 Months 2024
Revenue: RM7,332,000
Gross Profit: RM3,380,000
Operating (Loss)/Profit: RM879,000
(Loss)/Profit Before Tax: RM877,000
(Loss)/Profit for the Period: RM877,000
Basic (Loss)/Earning per Share: 0.18 sen
For the cumulative six-month period, revenue decreased by 27% to RM5.35 million from RM7.33 million in the first half of 2024. The Group recorded a cumulative loss before tax of RM1.55 million, a significant downturn from the RM0.88 million profit recorded in the same period last year. This comprehensive loss for the period led to a basic loss per share of 0.28 sen.
The report attributes the shift to a loss primarily to a higher proportion of revenue from business streams with narrower margins, coupled with increased administrative and other overhead expenses.
Delving Deeper: Segmental Performance
Understanding which segments contributed to the revenue and where the losses occurred provides crucial insight. FSBM operates primarily across three business segments:
| Segment | Q2 2025 Revenue (RM’000) | Q2 2024 Revenue (RM’000) | Change (%) | Q2 2025 Result (RM’000) | Q2 2024 Result (RM’000) |
|---|---|---|---|---|---|
| Intelligent Application and Digital Solutions | 3,118 | 2,239 | +39.2% | (10) | 315 |
| Managed Security Service | 0 | 294 | -100% | (25) | 215 |
| Smart Manufacturing Solutions | 523 | 1,006 | -48.0% | (414) | 0 |
The Intelligent Application and Digital Solutions segment was the primary driver of revenue growth for the quarter, increasing by approximately 39.2% to RM3.12 million. However, its segment result turned into a slight loss of RM0.01 million from a profit of RM0.32 million previously. This suggests that while sales grew, profitability was impacted by higher costs or lower margins.
The Managed Security Service segment reported no revenue for the current quarter, a significant drop from RM0.29 million, and incurred a loss of RM0.03 million. This segment clearly struggled in the quarter.
Smart Manufacturing Solutions saw its revenue nearly halve, falling by 48% to RM0.52 million. This segment also recorded a substantial loss of RM0.41 million, compared to a break-even result in Q2 2024.
Overall, while the Intelligent Application and Digital Solutions segment showed promising revenue growth, the profitability of all key segments faced significant pressure during the quarter, contributing to the Group’s overall loss.
Financial Health Check: Balance Sheet and Cash Flow
A quick look at the balance sheet as of 30 June 2025, compared to 31 December 2024, shows some shifts in the Group’s financial position:
30 June 2025
Total Assets: RM28,891,000
Total Equity: RM24,707,000
Accumulated Losses: (RM1,001,000)
Net Assets Per Share: RM0.05
Cash and Bank Balances: RM1,313,000
31 December 2024
Total Assets: RM29,154,000
Total Equity: RM26,209,000
Retained Earnings: RM551,000
Net Assets Per Share: RM0.05
Cash and Bank Balances: RM3,740,000
Total assets remained relatively stable at RM28.89 million, a slight decrease from RM29.15 million at the end of 2024. Non-current assets saw an increase, driven by additions to intangible assets (up by RM2.75 million) and property, plant, and equipment (up by RM0.08 million). However, current assets decreased, mainly due to a significant reduction in cash and bank balances from RM3.74 million to RM1.31 million.
Shareholders’ funds decreased to RM24.88 million from RM26.39 million, reflecting the accumulated losses for the period, which moved from a retained earnings position of RM0.55 million to accumulated losses of RM1.00 million. This indicates that the losses incurred are impacting the company’s equity position.
Cash Flow for the 6 Months Ended 30 June 2025
From the cash flow statement, FSBM generated RM1.22 million from operating activities, which is a positive sign that the core business is still generating cash. However, significant investments were made, with RM3.70 million used in investing activities, primarily for additions to intangible assets (RM2.79 million) and property, plant and equipment (RM0.80 million). Financing activities provided a modest RM0.06 million, mainly from warrant conversions. Overall, this led to a net decrease in cash and cash equivalents of RM2.43 million for the six-month period, reducing the cash balance to RM1.31 million.
Navigating Challenges and Charting the Future: Prospects and Strategies
Despite the current quarter’s losses, FSBM Holdings Berhad remains focused on its strategic direction and is actively working to address challenges and capitalize on emerging opportunities. The management acknowledges that market conditions remain challenging but sees sustained demand for advanced technological solutions.
Strategic Focus Areas:
- Digital Transformation: FSBM is committed to delivering intelligent, trusted, and secure digital solutions, focusing on Smart Manufacturing, Intelligent Applications and Digital Solutions, and Managed Security Services. These areas are crucial for driving digital transformation and strengthening business resilience across various sectors.
- Emerging Technologies: The Group anticipates sustained demand for AI-driven solutions, blockchain-enabled systems, and cybersecurity enhancements. This forward-looking approach positions FSBM to benefit from technological advancements.
- Broadening Offerings: FSBM plans to broaden its service offerings and cultivate recurring revenue streams through managed technology solutions. This is a crucial strategy to build more stable and predictable income.
- Sustainability and Risk Management: The integration of risk management and Environmental, Social, and Governance (ESG) practices across its operations demonstrates a commitment to sustainable value creation for stakeholders.
Recent Developments:
Subsequent to the quarter, on 12 August 2025, FSBM announced a significant step forward in its strategic evolution. Its wholly-owned subsidiary, FSBM I-Command Sdn. Bhd., entered into a Collaboration Agreement with Monochrome Corporation Pty Ltd. This partnership aims to establish a basis for collaboration in the exciting and rapidly evolving areas of Web 3.0, blockchain, and digital asset infrastructure. This move indicates FSBM’s proactive stance in tapping into future growth sectors.
Material Litigation Update:
The Group continues its efforts to recover significant outstanding debts from Technitium Sdn Bhd (TSB) and its directors, Dr Azman Bin Awang and Haliza Binti Bidin. Bankruptcy Orders have been obtained against the individuals, and the process of submitting Proofs of Debt is underway. This ongoing litigation, while a legacy issue, represents a potential future recovery for the Group.
Summary and Investment Recommendations
FSBM Holdings Berhad’s Q2 2025 report reveals a challenging quarter, with the Group posting a loss despite a modest increase in quarterly revenue. The decline in gross profit margins across its core segments, coupled with increased operating expenses, contributed significantly to the shift from profitability to a net loss. The balance sheet reflects these losses, moving into an accumulated loss position, while cash reserves have seen a notable reduction due to investment activities.
However, it’s not all headwinds. The Group’s strategic focus on high-growth digital transformation areas, including AI, blockchain, and cybersecurity, indicates a clear vision for future sustainability. The recent collaboration in Web 3.0 and digital asset infrastructure highlights proactive steps to innovate and secure new revenue streams. The ongoing efforts to recover material litigation debts could also provide a future boost to finances.
For Malaysian retail investors monitoring FSBM, the report underscores the current operational challenges, particularly in profitability and cash management. However, it also points to the company’s commitment to strategic initiatives that could drive long-term value. Future performance will heavily depend on the successful execution of these strategies, the ability to improve margins in existing segments, and the impact of its new ventures.
Key areas for investors to monitor going forward include:
- Profitability Turnaround: The Group’s ability to stem losses and return to profitability, particularly by improving gross profit margins and managing operating expenses.
- Segment Performance: The financial contribution and performance of the Intelligent Application and Digital Solutions, Managed Security Service, and Smart Manufacturing Solutions segments, especially their return to positive results.
- Cash Flow Management: How the Group manages its cash reserves amidst significant investing activities and seeks to generate stronger operating cash flows.
- Strategic Initiative Impact: The tangible outcomes and revenue generation from new collaborations in Web 3.0, blockchain, and other advanced digital solutions.
- Debt Recovery Progress: Updates on the material litigation and the potential recovery of outstanding debts from TSB and its directors.
From a professional standpoint, while the current quarter’s performance presents a setback in terms of profitability, the underlying strategic shifts towards high-demand tech sectors are crucial for long-term resilience. The increased investment in intangible assets, while impacting short-term cash flow, could be a necessary step for future growth and competitive advantage in a rapidly evolving digital landscape. The move into Web 3.0 and blockchain also suggests a forward-thinking leadership, aiming to capture the next wave of technological innovation.
What are your thoughts on FSBM’s latest report? Do you believe their strategic focus on digital transformation, AI, and blockchain will lead to a strong turnaround in the coming quarters? Share your insights and perspectives in the comments section below!
