Southern Cable Charges Ahead: Strong Q2 2025 Performance and Vision for Growth!
Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial heartbeat of Southern Cable Group Berhad, a key player in Malaysia’s industrial landscape. Their recently released interim financial report for the second quarter ended 30 June 2025 paints a vibrant picture of growth, strategic expansion, and a clear vision for the future. Get ready to uncover the impressive figures and the story behind Southern Cable’s remarkable journey!
Key Takeaways from the Report:
- Net Profit Doubled: Southern Cable’s net profit surged by a phenomenal 119.3% in Q2 2025 to RM31.6 million.
- Revenue Growth: Group revenue climbed 33.0% to RM419.3 million for the quarter.
- Strategic Expansion: A significant investment of close to RM40 million is underway to triple aluminium rod output and introduce new high-voltage cable production.
- Shareholder Returns: A first interim dividend of 1.20 sen per share for FY2025 has been declared.
This report isn’t just about numbers; it’s about a company actively leveraging market opportunities and strengthening its position. Let’s peel back the layers and understand what’s driving this momentum.
Unpacking the Core Financials: A Tale of Growth
Quarterly Performance: Q2 2025 vs. Q2 2024
Southern Cable delivered a sterling performance in the second quarter of 2025, significantly outpacing the same period last year. This surge is primarily attributed to increased sales volume and an expanded production capacity, demonstrating the company’s ability to meet growing demand.
Q2 2025 Highlights
Revenue: RM419,299,000
Profit Before Tax (PBT): RM42,080,000
Net Profit: RM31,644,000
Basic Earnings per Share: 3.37 sen
Q2 2024 Comparison
Revenue: RM315,329,000
Profit Before Tax (PBT): RM18,744,000
Net Profit: RM14,430,000
Basic Earnings per Share: 1.79 sen
Key Increases (Q2 2025 vs Q2 2024):
- Revenue: Up RM103.97 million, a substantial 32.97% increase. This was boosted by an approximate 14% higher production capacity of 51,980 km/year.
- Profit Before Tax: Soared by RM23.34 million, an impressive 124.50% jump, driven by higher revenue, a better product mix, and improved profit margins from economies of scale.
- Net Profit: More than doubled with a 119.3% increase.
Year-to-Date Performance: 1H 2025 vs. 1H 2024
Looking at the first half of 2025, Southern Cable’s growth trajectory remains robust, reinforcing its strong market position.
1H 2025 Highlights
Revenue: RM810,107,000
Profit Before Tax (PBT): RM77,937,000
Net Profit: RM59,046,000
Basic Earnings per Share: 6.56 sen
1H 2024 Comparison
Revenue: RM627,356,000
Profit Before Tax (PBT): RM37,316,000
Net Profit: RM28,503,000
Basic Earnings per Share: 3.56 sen
Key Increases (1H 2025 vs 1H 2024):
- Revenue: A solid 29.13% increase to RM810.11 million, driven by higher sales volume and adjusted average selling prices in line with raw material costs.
- Profit Before Tax: More than doubled with a 108.86% surge, mirroring the quarterly trend of higher revenue and improved product mix.
The company also saw a healthy increase in its profit before tax by 17.36% compared to the preceding quarter, from RM35.86 million in Q1 2025 to RM42.08 million in Q2 2025, on the back of a 7.29% revenue increase.
Performance by Business Segments
Southern Cable’s core business, power cables and wires, continues to be the primary engine of growth, while other segments also contribute meaningfully.
| Segment | Q2 2025 Revenue (RM’000) | Q2 2024 Revenue (RM’000) | Change (%) |
|---|---|---|---|
| Power Cables and Wires | 388,252 | 285,455 | +36.01% |
| Communication, Control & Instrumentation, and Others | 31,047 | 29,874 | +3.93% |
The Power cables and wires segment accounted for a significant 92.60% of total revenue in Q2 2025, demonstrating strong demand in power utility and construction sectors. The growth in the “Others” segment was partly due to higher sales of control and instrumentation cables and wires and new contributions from rectifier system installation services for the telecommunications sector.
Geographical Contributions
Malaysia remains Southern Cable’s largest market, but overseas expansion is clearly gaining significant traction, particularly in the United States.
- Domestic Market (Malaysia): Grew by 23.12% in Q2 2025 compared to the same quarter last year, contributing 88.77% of total revenue.
- Overseas Market: Skyrocketed by an impressive 261.78% in Q2 2025, making up the remaining 11.23% of revenue. This strong international performance highlights successful efforts to diversify market reach. For the first half, overseas sales surged by 353.56%.
Financial Health Check
Beyond the income statement, the balance sheet and cash flow statements provide crucial insights into the company’s financial robustness.
Snapshot of Financial Position (as at 30 June 2025 vs 31 December 2024):
- Total Assets: Increased by 24.22% to RM895.91 million, reflecting ongoing investments and operational growth.
- Total Equity: Grew by 17.23% to RM471.00 million, enhancing shareholder value.
- Net Assets Per Share: Rose from RM0.45 to RM0.49.
- Cash and Short-term Deposits: A significant increase of 73.56% to RM143.54 million, providing strong liquidity.
- Total Borrowings: Increased by 28.18% to RM276.49 million, likely supporting the capacity expansion.
From a cash flow perspective, while net cash from operating activities saw a slight decrease compared to the same period last year, the substantial cash generation from financing activities (up 428.30% compared to the same period last year to RM73.98 million) indicates successful capital raising and management to fund strategic initiatives, leading to a healthy increase in cash and cash equivalents by RM60.84 million for the year-to-date.
Navigating the Future: Risks and Prospects
Southern Cable’s future looks promising, underpinned by strong domestic demand, strategic overseas expansion, and significant investments in capacity and technology.
Underlying Drivers and Opportunities
- Robust Domestic Demand: The company benefits from sustained demand for cables and wires in Malaysia, driven by ongoing infrastructure development and the government’s National Energy Transition Roadmap (NETR). Key sectors include renewable energy, railways, and data centers.
- Strong Order Book: As of 30 June 2025, Southern Cable boasts a robust order book of RM1.17 billion, providing clear earnings visibility stretching until 2026. This includes major contracts with power utility companies and telecommunication providers.
- Overseas Growth: The focus on expanding overseas sales, particularly in the United States, is yielding significant results. The company is actively broadening its product portfolio and securing international certifications to accelerate this growth.
- Capacity Expansion: A crucial RM40 million capital expenditure project is well underway. This expansion will triple the Group’s aluminium rod output to over 60,000 metric tonnes annually and introduce a new production line for Medium- to Extra-High Voltage (33kV to 275kV) power cables. This move, scheduled for completion in 2026, is set to solidify Southern Cable’s position in the high-value cable sector.
Potential Headwinds
While the outlook is largely positive, the company acknowledges potential challenges. The report mentions “unforeseen macroeconomic headwinds” as a factor that could impact performance. These could include fluctuations in raw material prices (though the company has shown ability to adjust selling prices), global economic slowdowns affecting export markets, or increased competition.
Despite these potential challenges, Southern Cable’s proactive strategies—including continuous product range expansion, enhanced production capacity, and a resilient product portfolio—are designed to mitigate risks and capitalize on market growth.
Summary and Investment Considerations
Southern Cable Group Berhad has delivered an exceptionally strong second quarter and first-half performance for 2025, marked by impressive revenue and profit growth. The company is strategically positioned to benefit from significant infrastructure and energy transition initiatives in Malaysia, while aggressively expanding its footprint in lucrative overseas markets like the United States. The substantial order book and ongoing capacity expansion projects highlight a proactive management team focused on sustainable, long-term growth.
The declaration of a first interim dividend also signals the company’s commitment to returning value to its shareholders, which is always a welcome sign for retail investors.
Here are some key points for consideration based on this report:
- Strong Financial Performance: Consistent double-digit growth in both revenue and profit metrics across the quarter and year-to-date.
- Strategic Market Positioning: Benefiting from national infrastructure projects and a growing presence in the high-demand US market.
- Future-Proofing Investments: Significant capital expenditure in new facilities and high-voltage cable production lines ensures future capacity and competitiveness.
- Healthy Order Book: RM1.17 billion in orders provides excellent earnings visibility for the next couple of years.
- Shareholder Returns: The declared interim dividend reflects confidence in future profitability and a commitment to shareholders.
