NUENERGY Holdings Berhad Q2 2025: Surging Revenue, Strategic Shifts, and a Takeover Bid

Greetings, fellow investors and market enthusiasts!

Today, we’re diving deep into the latest financial report from NUENERGY Holdings Berhad (formerly known as ILB Group Berhad) for the second quarter ended 30 June 2025. This report offers a fascinating glimpse into a company undergoing significant transformation, marked by impressive revenue growth, a turnaround in profitability, and a host of strategic developments. From expanding its renewable energy footprint to navigating a conditional take-over offer, there’s a lot to unpack. Let’s explore the key highlights and what they might mean for the company’s future.

Financial Performance Snapshot: A Strong Turnaround

NUENERGY has reported a robust performance for Q2 2025 and the cumulative year-to-date, signaling a positive shift from the previous year’s losses. The company’s strategic focus on the renewable energy sector, particularly through recent acquisitions, appears to be yielding results.

Quarterly Highlights (Q2 2025 vs. Q2 2024)

The second quarter saw NUENERGY’s revenue more than double, while the company successfully transitioned from a loss-making position to a profit before tax.

Key Takeaway: Revenue surged by an impressive 145.1%, reaching RM6.0 million, primarily driven by new contributions from solar rooftop and SARE projects. This significant growth, along with a 58.7% rise in gross profit, highlights the positive impact of the acquisition of Armani Sinar Sdn Bhd (ASSB) and solar photovoltaic assets from Armani Energy Sdn Bhd (AESB).

Year-to-Date Performance (Cumulative Q2 2025 vs. Cumulative Q2 2024)

Looking at the first half of the year, the trend of strong growth and profitability turnaround continues.

Key Takeaway: Cumulative revenue for the first six months soared by 100.2% to RM11.3 million. The company also achieved a significant profit before tax of RM4.7 million, a stark contrast to the RM11.5 million loss recorded in the same period last year. This turnaround was substantially boosted by an RM18.4 million gain from the fair value of an investment in an associate listed on the Singapore Exchange.

Quarter-on-Quarter Comparison (Q2 2025 vs. Q1 2025)

While the year-on-year figures are impressive, a closer look at the immediate preceding quarter reveals some nuances.

Although revenue increased by 13.1%, profit before tax saw a significant decline of RM3.5 million from RM4.1 million in Q1 2025 to RM0.6 million in Q2 2025. This dip was primarily due to a RM3.0 million loss arising from the fair value adjustment of an associate investment, coupled with higher direct operating costs, other expenses, and finance costs. This illustrates the impact that non-operating items and operational costs can have on the bottom line, even amidst revenue growth.

Understanding the Financial Health

Examining the balance sheet, NUENERGY’s total assets grew from RM277.96 million (31 Dec 2024) to RM291.77 million (30 June 2025). This growth was mainly in property, plant and equipment, and other investments. However, total equity decreased slightly from RM221.50 million to RM214.72 million, partly due to the distribution of surplus assets to non-controlling interests related to a subsidiary winding-up.

The company’s total liabilities increased from RM56.45 million to RM77.05 million, driven largely by an increase in loans and borrowings (from RM43.16 million to RM67.88 million). This suggests increased leverage, likely to fund its expansion activities in the renewable energy sector.

Cash flow from operations showed a net cash used of RM1.15 million for the cumulative period, compared to RM7.76 million generated in the previous year. However, financing activities generated substantial cash of RM24.39 million, primarily from the net drawdown of term loans, reflecting the funding of recent acquisitions and capital commitments.

Strategic Horizon: Prospects, Challenges, and Key Developments

NUENERGY is clearly positioning itself for growth in Malaysia’s burgeoning renewable energy sector, backed by government initiatives like the Energy Exchange Malaysia. The company outlines a clear strategy to expand its solar portfolio and achieve sustainable earnings growth.

Driving Future Growth in Renewable Energy

NUENERGY aims to:

• Optimise operations and maximise the utilisation of acquired Solar Assets.
• Leverage ASSB’s expertise to source niche solar projects and secure rooftop solar projects.
• Explore opportunities in solar rooftop project tenders from government and industrial clients.
• Achieve economies-of-scale to enhance competitiveness.

The incorporation of NuOmni Enertrans Sdn Bhd, a wholly-owned subsidiary focused on energy transmission systems, further solidifies NUENERGY’s commitment to the broader energy infrastructure landscape.

Navigating Key Developments and Risks

The path forward is not without its complexities. Several significant corporate proposals and events demand attention:

• Acquisition of AESB Solar Assets: The proposed acquisition of RM68.0 million in solar photovoltaic assets from AESB has seen several extensions to its completion date, now set for 31 December 2025. While this indicates ongoing commitment, delays can introduce uncertainties.
• Disposal of Property: An initial Letter of Offer for the disposal of a property for RM6.88 million was withdrawn. However, a new Letter of Offer for RM6.60 million has since been accepted, with the proceeds intended for working capital and future expansions.
• Associate Investment Changes: The winding-up of a 70% owned subsidiary, Integrated Logistics (H.K.) Limited (ILHK), led to the distribution of its equity interest in Hengyang Petrochemical Logistics Limited, reducing NUENERGY’s effective stake to 18.06% and ceasing Hengyang’s status as an associate company. Additionally, NUENERGY completed the disposal of a further 10.14% equity interest in Hengyang for SGD3.3 million.
• Increased Borrowings: The substantial increase in term loans to fund acquisitions indicates higher financial leverage, which retail investors should monitor.
• Capital Commitments: A capital commitment of RM25.7 million for the acquisition of solar assets highlights ongoing investment needs.

The Conditional Take-Over Offer

Perhaps the most impactful news is the conditional voluntary take-over offer received on 18 August 2025 from Agrobulk Holdings Sdn Bhd. The offer is to acquire all remaining ordinary shares of NUENERGY not already owned by the Offeror and parties acting in concert, for a cash consideration of RM0.60 per share. This development could significantly shape the company’s future ownership and strategic direction, and will undoubtedly be a focal point for shareholders.

Feel free to share your perspectives in the comments section below. Your insights are invaluable!