HIL INDUSTRIES BERHAD Q2 2025: Navigating Headwinds with Strategic Growth Initiatives
Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of HIL INDUSTRIES BERHAD (HIL), a well-established Malaysian public limited company, following the release of their unaudited condensed consolidated interim financial statements for the second quarter ended 30 June 2025. This report offers a crucial snapshot of HIL’s journey through a dynamic economic landscape.
While the company faced some headwinds, impacting overall revenue and profit compared to the previous year, HIL is actively implementing strategic initiatives to bolster its manufacturing and property development segments. Notably, HIL has continued to return value to shareholders by declaring a final dividend, a testament to its commitment despite market challenges. Let’s unpack the key figures and strategic directions that will shape HIL’s path forward.
Financial Performance Overview: A Closer Look at Q2 2025
HIL’s latest quarter results show a dip in performance compared to the same period last year, reflecting a challenging operating environment. Let’s compare the key financial indicators:
Q2 2025 (3 Months Ended 30 June)
Revenue: RM47,109,000
Profit Before Taxation: RM12,180,000
Profit After Taxation: RM8,681,000
Basic Earnings Per Share: 2.55 sen
Q2 2024 (3 Months Ended 30 June)
Revenue: RM62,229,000
Profit Before Taxation: RM16,560,000
Profit After Taxation: RM12,508,000
Basic Earnings Per Share: 3.64 sen
For the individual quarter, revenue saw a decrease of approximately 24.3% while profit before taxation dropped by about 26.4%. Basic earnings per share also saw a decline, reflecting the lower profitability.
Looking at the cumulative six-month period, the trend of reduced performance persists:
Cumulative H1 2025 (6 Months Ended 30 June)
Revenue: RM93,040,000
Profit Before Taxation: RM21,028,000
Profit After Taxation: RM14,527,000
Basic Earnings Per Share: 4.24 sen
Cumulative H1 2024 (6 Months Ended 30 June)
Revenue: RM125,307,000
Profit Before Taxation: RM32,229,000
Profit After Taxation: RM23,396,000
Basic Earnings Per Share: 6.79 sen
Over the first half of 2025, HIL’s revenue decreased by 25.75%, and profit before tax fell by 34.75% compared to the same period in 2024. This significant reduction is largely attributable to the performance of its key business segments, as detailed below.
Segmental Performance: Decoding the Contributions
Understanding the performance of HIL’s various business units provides clarity on the overall financial picture:
Manufacturing Segment
The manufacturing division, a cornerstone of HIL’s operations, reported a revenue of RM73,461,000 for the first six months of 2025, a 10.33% decrease from RM81,922,000 in the corresponding period last year. Segment results also saw a 21.57% drop to RM14,040,000. This decline was primarily due to a slight reduction in demand from the automotive division and fewer production days stemming from planned festive season shutdowns by major customers. The Malaysian Automotive Association (MAA) reported a 4.6% decline in total industry volume (TIV), further illustrating the challenging environment.
Property Development and Management Segment
This segment experienced a more pronounced downturn. Revenue for the first half of 2025 was RM19,538,000, a substantial 54.82% decrease from RM43,245,000 previously. Consequently, segment results fell by 52.01% to RM6,017,000. The main reasons cited were the completion of sales for the Amverton Hills projects in 2024 and the absence of new project launches during the current year.
Trading, Services and Others Segment
In a brighter spot, this smaller segment saw an increase in revenue of 48.88% to RM862,000 and a significant reduction in losses (or rather, a swing to profit) of 115.69% to RM8,000. This positive shift was attributed to a favourable product mix of prescribed drugs and supplements, which carry higher margins.
Financial Health and Cash Flow
As of 30 June 2025, HIL’s financial position remains robust, with total assets increasing to RM630,843,000 from RM604,741,000 at the end of 2024. Total equity also grew to RM484,770,000 (from RM480,877,000), contributing to a slight increase in net assets per share to RM1.44 (from RM1.43).
However, the cash flow statement reveals a significant shift in operating activities. Net cash used in operating activities for the six months ended 30 June 2025 was RM(19,938,000), a stark contrast to the RM53,772,000 generated in the same period last year. This change was largely impacted by an increase in inventories and receivables. On a positive note, net cash from investing activities swung to a positive RM11,930,000 (from a use of RM47,557,000 last year), primarily due to proceeds from redemption of investments, offsetting new purchases. Cash and cash equivalents at the end of the period stood at RM90,918,000, down from RM146,672,000 a year ago.
Risks and Future Prospects: Charting the Course Ahead
HIL acknowledges the challenging global economic environment, citing uncertainties from US tariffs and ongoing conflicts in Ukraine and the Middle East that could trigger a global recession. Domestically, the implementation of Sales and Service Tax (SST) and an increase in the minimum wage also pose challenges. Despite these headwinds, the Group remains cautiously optimistic and is confident of performing well in the coming financial year 2025 by focusing on strategic growth and efficiency improvements.
Strategic Initiatives:
- Manufacturing Division: The company anticipates continued strong performance, driven by the launch of several new automotive models and an expansion of its product range by Q4 2025. HIL is investing in new machines, automating production lines, and enhancing human capital training to streamline costs and improve efficiency. The integration of advanced processes, including A.I., is also underway to boost production efficiencies. Aggressive efforts to attract new customers and secure additional business from existing clients are key to ensuring continuous growth.
- Property Division: HIL plans to launch new property projects in Carey Island in the near future. A significant milestone was achieved on 4 August 2025, with a strategic joint venture between Amverton Prop Sdn. Bhd. and PKNS Group to develop a high-impact urban project. The Group aims to expand its property business, particularly in the Klang Valley, with a focus on affordable housing, and is actively seeking opportunities to acquire more land for development in the region.
These proactive strategies aim to mitigate risks and capitalize on opportunities, ensuring sustainable growth for HIL.
Summary and Investment Recommendations
HIL INDUSTRIES BERHAD’s Q2 2025 report reveals a period of adjustment amidst a challenging economic landscape. While the headline figures show a decline in revenue and profitability, particularly in the manufacturing and property segments, it is crucial to look beyond these numbers and understand the underlying dynamics and strategic responses. The decrease in manufacturing was influenced by lower automotive demand and festive shutdowns, while the property segment felt the impact of completed projects and the timing of new launches.
However, HIL is not resting on its laurels. The company is actively pursuing several strategic initiatives across its divisions, from technological upgrades and product expansion in manufacturing to key joint ventures and new project launches in property development. The slight positive performance in the trading segment also demonstrates agility in product mix. The dividend payout reflects a continued commitment to shareholder returns.
Key points from this report:
- Revenue and profit for Q2 2025 and H1 2025 saw a decline compared to the same periods last year, largely due to external market conditions and project cycles.
- The manufacturing segment is adapting with new product launches and efficiency investments, including AI.
- The property division is gearing up for new project launches and a significant joint venture, signaling future growth.
- Despite a shift to negative operating cash flow, the balance sheet remains strong with increased total assets and equity.
- A dividend payout underscores the company’s commitment to shareholders.
The management’s cautious optimism, backed by clear strategic plans to navigate global and local economic challenges, suggests a forward-looking approach. Investors should consider these long-term strategies and the company’s historical resilience when assessing its future trajectory.
Final Thoughts and Looking Ahead
As a senior blogger observing the Malaysian market, HIL’s report presents a mixed but understandable picture. The decline in key financial metrics is a clear indicator of the challenging environment, but the proactive measures being taken across its core businesses, especially the strategic joint venture in property and the technological investments in manufacturing, are encouraging.
The company’s ability to maintain a strong balance sheet and continue with dividend payouts, even in a tougher period, speaks volumes about its underlying financial health and management’s confidence. The focus on expanding in the Klang Valley for affordable housing and diversifying product ranges in manufacturing aligns well with market needs.
What are your thoughts on HIL’s strategies? Do you believe the new project launches and operational efficiencies will enable the company to regain its growth momentum in the coming quarters? Share your insights and perspectives in the comments section below! Let’s discuss how HIL INDUSTRIES BERHAD might perform in the dynamic Malaysian market going forward.
For more detailed analyses of Malaysian companies, stay tuned to our blog for future updates!
