Saliran Group’s Q2 FY2025: Strong Revenue Growth Amidst Strategic Pricing and Global Headwinds
By [Your Blogger Name], Senior Financial Analyst
Kuala Lumpur, 26 August 2025
Saliran Group Berhad (Saliran), a key player in the supply and distribution of industrial pipes, fittings, and steel products, has unveiled its financial results for the second quarter ended 30 June 2025 (Q2 FY2025). The report highlights a significant 22.5% revenue surge in Q2, reaching RM116.3 million, driven primarily by robust domestic demand. While this marks a positive stride in their growth trajectory, the company has strategically adjusted its pricing to secure long-term client relationships, impacting profit margins. This report offers a deep dive into Saliran’s performance, strategic moves, and future outlook, especially for Malaysian retail investors eyeing the industrial sector.
Core Financial Performance: A Closer Look at Q2 FY2025
Saliran Group’s Q2 FY2025 results demonstrate solid top-line expansion, reflecting healthy market activity. However, a deliberate strategy to enhance market share and customer loyalty led to a moderation in profit margins this quarter.
Quarter-on-Quarter Comparison (Q2 FY2025 vs Q1 FY2025)
Comparing the current quarter with the immediate preceding one (Q1 FY2025), Saliran has shown impressive revenue momentum. Please note that as this is Saliran’s second interim financial report since listing, comparative figures for the preceding corresponding quarter last year are not available.
Q2 FY2025
Revenue: RM116.34 million
Profit Before Tax (PBT): RM2.42 million
Gross Profit Margin: 8.40%
Profit After Tax (PAT): RM1.41 million
Basic & Diluted Earnings Per Share (EPS): 0.37 sen
Q1 FY2025
Revenue: RM95.00 million
Profit Before Tax (PBT): RM4.38 million
Gross Profit Margin: 17.05%
Profit After Tax (PAT): RM2.60 million
Basic & Diluted Earnings Per Share (EPS): Not explicitly stated for Q1, but PAT was higher.
As evident, revenue increased by RM21.34 million, or 22.46%, largely driven by higher sales orders from local customers engaged in infrastructure-related projects. Domestic revenue now accounts for 77.5% of Q2 sales, up from 72.5% in the previous quarter, indicating strong Malaysian market demand.
Despite this robust top-line growth, Profit Before Tax (PBT) saw a decrease of RM1.96 million, or 44.75%, primarily due to a reduction in gross profit margins from 17.05% in Q1 FY2025 to 8.40% in Q2 FY2025. Saliran’s management clarified that this margin compression is a result of strategic pricing initiatives aimed at retaining existing clients and attracting new accounts, crucial for their long-term customer acquisition strategy.
First Half (1H) FY2025 Cumulative Performance
For the six-month period ending 30 June 2025, Saliran achieved a cumulative revenue of RM211.3 million and a total Profit After Tax of RM4.0 million. Adjusting for one-off listing expenses of RM0.7 million incurred during Q1, the Group’s normalised Profit Before Tax stood at RM7.5 million, indicating a solid underlying operational performance. The cumulative basic and diluted Earnings Per Share (EPS) for this period was 1.06 sen.
Business Segment Contributions
Saliran’s core business continues to be the supply and distribution segment, which significantly outweighs its manufacturing operations:
| Business Segment | Q2 FY2025 Revenue (RM’000) | Contribution to Total Revenue (%) |
|---|---|---|
| Supply and Distribution | 115,735 | 99.5% |
| Manufacturing | 606 | 0.5% |
| Total | 116,341 | 100.0% |
Geographically, while local revenue surged, Indonesia’s contribution to total revenue slightly decreased to 22.43% in Q2 FY2025 (from 27.40% in Q1 FY2025), even though absolute sales to Indonesia increased. This highlights the accelerated growth in the domestic market.
Financial Health: Balance Sheet & Cash Flow
Saliran’s financial position as at 30 June 2025 shows a healthy increase in total assets and equity, partly boosted by its recent IPO. For comparison, we will look at the figures as at 31 December 2024.
As at 30 June 2025
Total Assets: RM217.12 million
Total Equity: RM67.46 million
Net Assets per Share: RM0.18
Cash & Bank Balances: RM56.53 million
As at 31 December 2024
Total Assets: RM183.14 million
Total Equity: RM43.44 million
Net Assets per Share: RM0.14
Cash & Bank Balances: RM38.28 million
The company also reported a net cash generation of RM855,000 from operating activities for the first half of FY2025. Crucially, net cash generated from financing activities stood at RM19.94 million, reflecting the proceeds from its successful IPO in March 2025. This has significantly bolstered its cash and cash equivalents, which increased from RM33.85 million at the start of the financial period to RM53.03 million by period-end.
Strategic Outlook and Navigating Market Challenges
Saliran Group is not resting on its laurels. The management is actively pursuing growth strategies while keeping a close eye on the evolving global economic landscape.
Addressing Global Headwinds
The Group acknowledges potential challenges from a global economic slowdown, exacerbated by recent trade tariffs imposed by the United States on its trading partners, including Malaysia. A 19% reciprocal tariff on Malaysian imports, alongside persistent geopolitical uncertainties, has already seen Malaysia’s Q1 2025 GDP growth reduce to 4.4% from 5.0% in the preceding quarter. Bank Negara Malaysia projects annual growth may fall below earlier estimates.
In response, Saliran emphasizes cautious cost management and business expansion, coupled with continuous efforts to improve operational efficiency. This proactive approach aims to mitigate risks from foreign exchange fluctuations and potential disruptions to global supply chains.
Strategic Growth Initiatives
Despite the cautious outlook, Saliran remains optimistic about its prospects, particularly in the oil and gas industry. Key strategies include:
- Indonesia Expansion: Establishing a sales office to deepen its regional presence.
- Quality Assurance: Enhancing quality control procedures to maintain competitive advantage.
- Logistics Improvement: Expanding its fleet of delivery trucks to optimize supply chain efficiency.
- Brand Development: Further developing and growing the supply and distribution of its jointly-owned “THF” brand products.
A significant development is the Memorandum of Understanding (MOU) signed on 6 August 2025 with Maoming Port Group (China) and PCA Group (Malaysia). This collaboration is set to foster industrial synergy in the oil and gas sector through technical exchanges, training, and research cooperation, focusing on low-carbon refining, smart factory innovation, and Carbon Capture, Utilisation, and Storage (CCUS) technologies. This partnership is expected to strengthen Saliran’s technical capabilities, regional connectivity, and value chain integration across Southeast Asia.
IPO Proceeds Utilisation
Following its successful listing on the ACE Market in March 2025, Saliran is diligently implementing its IPO-funded expansion roadmap. As of 30 June 2025, RM10.6 million of the total RM21.7 million IPO proceeds have been utilised, primarily for working capital and listing-related costs. Planned allocations for machinery purchases, delivery trucks, and the establishment of the Indonesia sales office are on track for progressive execution in the coming quarters.
Summary and Investment Recommendations
Saliran Group’s Q2 FY2025 report paints a picture of a company navigating a complex economic environment with a clear strategic vision. While the quarter saw a robust increase in revenue, driven by strong domestic demand, the associated dip in profit margins reflects a deliberate, long-term strategy to bolster customer relationships and market share. The company’s proactive measures against global economic headwinds, coupled with strategic partnerships and ongoing IPO-funded expansion, position it for continued relevance in the industrial supply sector.
For retail investors, Saliran’s focus on operational efficiency, regional expansion into high-growth markets like Indonesia, and technological advancements through strategic MOUs could be indicators of future value creation. However, the external macroeconomic pressures, particularly trade tariffs and global economic slowdowns, warrant close monitoring.
Key risk points highlighted in the report include:
- Potential slowdown in the global economy due to trade tariffs, leading to higher business costs and global inflation.
- Impact of a 19% reciprocal tariff imposed by the United States on Malaysian imports, potentially affecting national economic growth.
- Persistent geopolitical uncertainties, trade policy risks, and fluctuations in foreign exchange currencies that could disrupt global supply chains.
- Strategic pricing initiatives, while aimed at long-term customer acquisition, currently reduce gross profit margins.
Saliran’s management appears committed to sustainable growth, balancing short-term profitability with long-term strategic investments and market positioning.
