Greetings, fellow investors and market enthusiasts!
Today, we’re diving into the latest financial report from Orgabio Holdings Berhad (Orgabio), specifically for the fourth quarter ended 30 June 2025. This report provides a comprehensive look at the company’s performance, offering insights into its growth trajectory and the challenges it navigating. The headline figures paint a compelling picture: strong top-line growth driven by robust demand, but also reveal the initial costs associated with strategic investments. Let’s unwrap the details and see what’s truly brewing at Orgabio.
Orgabio Holdings Berhad Q4 FY2025: Key Financial Highlights
Orgabio has reported a dynamic quarter with impressive revenue growth, signaling strong market demand for its products and services. However, the path to profitability reflects the significant investments made in expanding its operations.
Overall Financial Performance: A Tale of Growth and Strategic Costs
Orgabio’s revenue story for this quarter is one of significant expansion. The company reported a substantial increase in its top-line figures, a testament to growing market penetration and product appeal.
Current Quarter (30 June 2025)
Revenue: RM 34,204k
Gross Profit: RM 4,641k
Profit Before Tax (PBT): RM 1,632k
Net Profit After Tax: RM 496k
Basic Earnings Per Share: 0.20 sen
Preceding Year Corresponding Quarter (30 June 2024)
Revenue: RM 20,904k
Gross Profit: RM 3,569k
Profit Before Tax (PBT): RM 1,421k
Net Profit After Tax: RM 974k
Basic Earnings Per Share: 0.39 sen
For the current quarter ended 30 June 2025, Orgabio’s revenue surged by an impressive 63.62% compared to the same quarter last year. This remarkable growth was mainly fuelled by higher demand for the Group’s new product offerings, especially its instant beverage manufacturing services for third-party brand owners. Both domestic and international markets contributed to this uplift.
Looking at the cumulative performance for the full financial year (period-to-date), the trend remains robust:
Current Period-to-date (30 June 2025)
Revenue: RM 111,051k
Gross Profit: RM 17,901k
Profit Before Tax (PBT): RM 6,601k
Net Profit After Tax: RM 3,927k
Basic Earnings Per Share: 1.58 sen
Preceding Period-to-date (30 June 2024)
Revenue: RM 74,139k
Gross Profit: RM 13,875k
Profit Before Tax (PBT): RM 5,647k
Net Profit After Tax: RM 4,109k
Basic Earnings Per Share: 1.66 sen
Cumulative revenue for the period-to-date saw a significant 49.79% increase, driven by similar factors, with the domestic market showing a substantial surge in demand.
While gross profit also grew (30.04% for the quarter and 29.04% for period-to-date), the gross profit margin experienced a decline from 17.07% to 13.56% for the quarter. This was primarily due to higher material costs from increased raw material prices, as well as higher production overheads and direct labour expenses incurred from the commencement of operations at the Group’s new factory. The new facility requires a “gestation period” before achieving optimal sales volume, which impacts efficiency in the short term. Additionally, direct labour costs rose due to an upward revision of minimum wages.
Profit Before Tax (PBT) showed a positive trend, increasing by 14.85% for the quarter and 16.89% for the period-to-date. However, this was partially offset by a realised loss on foreign exchange, attributed to the appreciation of the Malaysian Ringgit against the USD, which affected overseas trade receivables.
Despite the growth in revenue and PBT, the net profit after tax actually declined for both the quarter (from RM974k to RM496k) and the period-to-date (from RM4,109k to RM3,927k). This significant drop is largely due to a substantially higher tax expense. The Group’s effective tax rate jumped to 70% for the quarter and 41% for the period-to-date (compared to the statutory rate of 24%), mainly due to the recognition of deferred tax liabilities associated with the new factory assets. This is a critical point for investors to understand: while the business is growing, strategic investments are impacting short-term reported earnings through higher tax provisions.
Business Unit Performance: Manufacturing Drives Growth
Orgabio’s core strength lies in its provision of instant beverage premixes manufacturing services for third-party brand owners. This segment was the primary engine of growth, contributing the lion’s share of the revenue. The company successfully expanded its product offerings, especially in the domestic market, while maintaining growth in international segments. This diversified market reach is a healthy sign of demand and market acceptance.
Revenue by Business Activities (RM’000)
| Business Activity | Current Q (30.06.2025) | Preceding Q (30.06.2024) | Current YTD (30.06.2025) | Preceding YTD (30.06.2024) |
|---|---|---|---|---|
| Instant Beverage Premixes Manufacturing Services | 33,996 | 20,694 | 110,371 | 73,454 |
| Trading – others | 208 | 210 | 680 | 685 |
| Total Revenue | 34,204 | 20,904 | 111,051 | 74,139 |
The domestic market showed particularly strong growth, highlighting successful strategies in local market penetration and catering to evolving consumer demands. Overseas markets also continue to show sustained growth, indicating the global appeal and competitiveness of Orgabio’s offerings.
Revenue by Geographical Market (RM’000)
| Market | Current Q (30.06.2025) | Preceding Q (30.06.2024) | Current YTD (30.06.2025) | Preceding YTD (30.06.2024) |
|---|---|---|---|---|
| Domestic | 17,839 | 8,215 | 57,601 | 29,247 |
| Overseas | 16,365 | 12,689 | 53,450 | 44,892 |
| Total Revenue | 34,204 | 20,904 | 111,051 | 74,139 |
Financial Health: Investing for the Future
Orgabio’s balance sheet reflects significant investments. Total assets grew from RM77,409k last year to RM98,594k as of 30 June 2025, largely driven by an increase in property, plant, and equipment (PPE). This aligns with the company’s recent completion and commencement of operations at its new factory, a major capital expenditure aimed at boosting production capacity. Total equity also saw a healthy rise from RM55,788k to RM59,715k, pushing the net assets per share from RM0.22 to RM0.24, indicating an improved intrinsic value for shareholders.
From a cash flow perspective, net cash generated from operating activities improved significantly, from RM4,238k last year to RM6,891k for the current period-to-date. This strong operational cash flow is crucial, especially as the company is heavily investing. Net cash used in investing activities increased from RM8,541k to RM11,039k, which is understandable given the capital expenditure on the new factory. The decrease in cash and cash equivalents from RM13,065k to RM9,271k is a direct consequence of these large-scale investments aimed at future growth.
Risks and Prospects: Navigating the Landscape
The future for Orgabio looks promising, underpinned by positive industry trends. The global instant beverage market is projected to grow from USD 65.62 billion in 2024 to USD 103.75 billion by 2031, with a Compound Annual Growth Rate (CAGR) of 6.94%. Closer to home, the Malaysian instant beverage premix market is also expected to record steady growth, from USD 558.97 million in 2024 to USD 835.85 million by 2029, at a CAGR of 6.97%. These figures provide a strong tailwind for Orgabio’s business.
Orgabio is strategically positioning itself to capitalize on this growth. The commencement of operations at its newly completed factory, coupled with the attainment of Halal certification from Jakim in May 2025, significantly enhances its production capacity and market reach. This expansion allows the company to serve a broader client base, diversify its product portfolio, and explore new markets. The company remains optimistic and is focused on fulfilling existing orders while actively pursuing new opportunities both domestically and internationally.
However, like any business, Orgabio faces certain challenges and risks:
- Cost Pressures: The current report highlights higher material costs due to increased raw material prices and rising direct labour costs (due to minimum wage revision). Managing these input costs will be critical for maintaining healthy gross profit margins.
- New Factory Gestation Period: While the new factory is a strategic asset, its initial “gestation period” means higher production overheads and direct labour costs without immediate optimal sales volume, potentially affecting short-term profitability.
- Foreign Exchange Fluctuations: Realised losses on foreign exchange due to Ringgit appreciation against the USD can impact profitability, especially for businesses with significant international trade receivables.
- Material Litigation: The company is involved in a material litigation case to claim a debt of RM422,824.18. While the trial dates are set for May 2026, the outcome could have a financial impact.
- High Effective Tax Rate: The significantly higher effective tax rate, primarily due to deferred tax liabilities from new factory assets, will continue to compress net profits in the short to medium term.
Corporate Developments
In terms of corporate activities, Orgabio completed a bonus issue of up to 61,966,995 free warrants on 15 April 2025, on the basis of 1 Warrant for every 4 existing ordinary shares. Additionally, an employee share scheme (ESS) of up to 10% of the total issued shares was implemented on 23 April 2025. These moves aim to enhance shareholder value and employee alignment.
Summary and Outlook
Orgabio Holdings Berhad has delivered a quarter characterized by impressive revenue growth, demonstrating robust demand for its instant beverage premix manufacturing services. The company is actively investing in its future through significant capital expenditure on a new factory and securing critical certifications like Halal from Jakim, which are vital for expanding capacity and market reach. These strategic moves position Orgabio well to capitalize on the projected growth in both global and Malaysian instant beverage markets.
However, these growth investments are not without their initial costs. The report highlights a contraction in gross profit margins due to higher raw material and labour costs, as well as the initial operational inefficiencies of the new factory during its gestation period. More notably, net profit has seen a temporary decline despite increased PBT, largely due to a significantly higher effective tax rate stemming from deferred tax liabilities associated with the new facility. This suggests that while the business is fundamentally growing and making smart long-term moves, the short-term financial reporting will reflect these initial investment burdens.
Key risk points for investors to monitor include:
- Sustained pressure on gross profit margins from raw material and labour costs.
- The duration and impact of the new factory’s gestation period on operational efficiency and profitability.
- Fluctuations in foreign exchange rates affecting overseas receivables.
- The outcome and potential financial impact of the material litigation case.
- The continued high effective tax rate as deferred tax liabilities are recognized.
Overall, Orgabio is clearly in a growth phase, backed by strong market fundamentals and strategic capacity expansion. The challenge ahead will be to navigate the initial cost pressures and optimize the new facility to translate top-line growth into sustainable net profit expansion.
From a professional point of view, Orgabio’s strategy appears to be a calculated one: invest now to capture future market share in a growing industry. The dip in net profit, while concerning at first glance, seems to be a consequence of necessary investments and their accounting implications rather than a fundamental weakness in demand or operational execution. The key for Orgabio will be to move swiftly through the new factory’s gestation period and leverage its increased capacity and certifications effectively.
What are your thoughts on Orgabio’s strategy to ramp up production with their new facility? Do you think the current challenges are just temporary growing pains, or do they signal deeper issues? Share your views and let’s discuss in the comments below!
Stay tuned for more market insights and financial report breakdowns!
