Core Data Highlights: A Tale of Two Halves

Overall Quarterly Performance (2Q2025 vs. 2Q2024)

The second quarter of 2025 paints a mixed picture, but one with a significant positive shift in profitability. Let’s look at the key figures:

While revenue for the current quarter saw a decrease of 21% to RM138.2 million compared to RM174.4 million in the corresponding quarter of 2024, primarily due to lower contributions from the tapes and timber segments, the Group’s Profit Before Tax (PBT) surged by RM12.8 million to RM17.5 million. This impressive PBT growth was largely driven by stronger performance in the Plantation segment and significant insurance claims recognized by the Tapes segment.

Cumulative Six-Month Performance (6M2025 vs. 6M2024)

Looking at the first six months of the year, the picture is more challenging:

For the six months ended 30 June 2025, WTK Holdings recorded a revenue of RM294.7 million, down from RM333.4 million in the prior year. More notably, the Group reported a nominal loss before tax of RM73,000, a significant shift from the RM9.96 million profit before tax in the same period last year. This cumulative performance was heavily influenced by factors such as the tapes plant fire incident and the scaling down of logging operations, leading to higher expenses and lower revenue in certain segments.

Segmental Deep Dive (2Q2025 vs. 2Q2024)

Let’s break down how each business unit performed:

• Plantation Segment: Growing Strong

  2Q2025 Revenue: RM78,690k

  2Q2025 Profit Before Tax: RM11,182k

  2Q2024 Revenue: RM75,142k

  2Q2024 Profit Before Tax: RM7,648k

  The Plantation segment, involved in oil palm cultivation and crude palm oil production, showed robust growth. Revenue increased by 5% to RM78.7 million, and Profit Before Tax (PBT) jumped 46% to RM11.2 million. This positive performance was primarily driven by higher production of fresh fruit bunches (FFB).

• Food Segment: Expanding Reach, Facing Headwinds

  2Q2025 Revenue: RM32,262k

  2Q2025 Profit Before Tax: RM1,209k

  2Q2024 Revenue: RM26,109k

  2Q2024 Profit Before Tax: RM1,530k

  The Food segment, dealing in frozen, chilled, and consumer products, saw its revenue rise by 24% to RM32.3 million. This was attributed to increased market penetration, a broader product range, rising consumer demand, and the opening of a new retail outlet. However, PBT decreased by 21% to RM1.2 million, mainly due to intense price competition, higher material costs, and compressed profit margins.

• Tapes Segment: Bouncing Back with Insurance

  2Q2025 Revenue: RM10,844k

  2Q2025 Profit Before Tax: RM11,400k

  2Q2024 Revenue: RM15,240k

  2Q2024 Profit Before Tax: RM1,213k

  The Tapes segment, manufacturing adhesive and gummed tapes, experienced a 29% decrease in revenue to RM10.8 million. This was primarily a result of operational disruption caused by a fire incident at its manufacturing plant in January 2025. Despite this, PBT skyrocketed to RM11.4 million, largely due to the recognition of RM13.0 million in insurance claims as income.

• Timber Segment: Strategic Downsizing

  2Q2025 Revenue: RM15,495k

  2Q2025 Profit Before Tax: RM650k

  2Q2024 Revenue: RM56,643k

  2Q2024 Profit Before Tax: RM(1,428)k

  The Timber segment recorded a significant 73% decrease in revenue to RM15.5 million. This reduction reflects the cessation of plywood manufacturing operations and the scaling down of logging activities, in line with the proposed disposal of logging subsidiaries. Despite lower revenue, the segment managed to turn a loss into a profit before tax of RM650,000, mainly attributed to reductions in fixed overheads from the scaled-down operations.

Financial Health and Cash Flow

Beyond profits, a glance at the balance sheet and cash flow statement provides crucial insights into the company’s financial health.

A notable highlight is the substantial improvement in cash flow from operating activities, which surged to RM133.1 million for the six months ended 30 June 2025, a remarkable increase from RM8.2 million in the prior year. This demonstrates a much stronger ability to generate cash from its core operations. Furthermore, the company has managed to reduce its total loans and borrowings to RM399.4 million as of 30 June 2025, down from RM463.3 million at the end of 2024, indicating a deleveraging effort. Cash and bank balances remain stable at RM263.4 million.

Strategic Realignment: Focusing on Core Strengths

WTK Holdings is clearly undergoing a strategic realignment to enhance its long-term viability and profitability. The company aims to concentrate on business segments with greater commercial potential, sustainability, and profitability.

The core of this strategy involves prioritizing the Plantation and Food operations. The Plantation segment is expected to continue its growth trajectory, boosted by the acquisition of Durafarm Sdn. Bhd. and a favorable crop profile with a significant portion of oil palms entering higher yielding age brackets. The Food segment is also expanding its market position through increased cold room capacity, broader product ranges, and new retail outlets, expecting to sustain its satisfactory performance.

Conversely, the company maintains a cautious outlook for the Tapes segment, given the competitive landscape and the lingering impact of the fire incident. The most significant shift is in the Timber segment, which has faced challenges from subdued market demand and stricter operational requirements. To address this, WTK is in the process of divesting non-core timber assets, including proposed disposals of Piramid Intan Sdn. Bhd. (RM16.0 million), Immense Fleet Sdn. Bhd. (RM24.345 million), and Song Logging Company Sendirian Berhad (RM23.5 million). These divestments, though not yet completed, are expected to streamline operations and enhance the segment’s financial position, allowing the Group to sharpen its focus and optimize resource allocation towards segments with stronger long-term prospects.