Hume Cement Lights Up FY2025: Strong Profit Growth Amidst Shifting Sands
Greetings, fellow Malaysian investors! Today, we’re diving deep into the latest financial pulse from Hume Cement Industries Berhad, a key player in our nation’s construction materials sector. The company has just released its unaudited quarterly report for the fourth quarter ended 30 June 2025, wrapping up its financial year with some noteworthy results.
This report highlights a period of impressive profit growth for Hume Cement, even as it navigates market complexities, signaling management’s effective strategies in cost optimization. Furthermore, shareholders can cheer a total dividend of 10 sen per share for the financial year.
Let’s unpack the numbers to understand what’s driving these results and what they could mean for the future.
Q4 FY2025 Performance: A Closer Look at the Latest Quarter
For the fourth quarter, Hume Cement demonstrated resilience by boosting its profitability despite a slight dip in revenue. The focus on efficiency truly shone through.
Q4 FY2025 (30/06/2025)
Revenue: RM263,358,000
Profit Before Taxation (PBT): RM74,866,000
Net Profit Attributable to Owners: RM53,606,000
Basic Earnings Per Share: 7.43 sen
Q4 FY2024 (30/06/2024)
Revenue: RM265,909,000
Profit Before Taxation (PBT): RM57,066,000
Net Profit Attributable to Owners: RM42,486,000
Basic Earnings Per Share: 6.49 sen
While revenue saw a marginal decrease of about 0.96% compared to the same quarter last year, primarily due to lower cement selling prices, the company’s PBT surged by an impressive 31.19%. This significant leap in profitability was a direct result of lower input and production costs, driven by the Group’s ongoing continuous improvement programs. Similarly, net profit attributable to owners rose by 26.17%, leading to a healthier basic earnings per share, up 14.48%.
Quarter-on-Quarter Momentum
Comparing the current quarter against the immediate preceding quarter (Q3 FY2025), Hume Cement’s PBT experienced a substantial increase from RM57.975 million to RM74.866 million, a rise of approximately 29.13%. This improvement was again attributed to lower input and production costs. It’s also worth noting that the preceding quarter’s PBT included one-off costs related to a strategic review for its concrete business in Peninsular Malaysia, making the current quarter’s performance even more commendable.
Full-Year FY2025: A Mixed Picture with Positive Signals
Looking at the full financial year, Hume Cement faced headwinds in revenue but successfully navigated them to deliver solid profit growth.
Key Financial Year-to-Date Figures (FY2025 vs FY2024)
| Indicator | FY2025 (RM’000) | FY2024 (RM’000) | Change (%) |
|---|---|---|---|
| Revenue | 1,114,601 | 1,205,222 | -7.49% |
| Profit Before Taxation | 295,079 | 279,376 | +5.62% |
| Net Profit Attributable to Owners | 223,171 | 210,939 | +5.79% |
| Basic Earnings Per Share (sen) | 30.84 | 36.02 | -14.40% |
For the full financial year, revenue declined by 7.49%, primarily due to a decrease in cement sales volume. However, the Group’s PBT for the year increased by 5.62%, and net profit attributable to owners grew by 5.79%. This improvement in profitability was largely due to lower input and production costs and a significant gain from the disposal of an asset held for sale, which amounted to RM34.868 million (pre-tax).
It’s interesting to note that despite the higher net profit, the basic earnings per share actually decreased from 36.02 sen to 30.84 sen. This is because the weighted average number of ordinary shares significantly increased during the year, from 585,479,000 to 723,696,000, diluting the per-share earnings.
Segmental Performance: Construction Materials Remain Core
The Group’s primary business, construction materials, continues to be the main contributor. For the financial year-to-date, this segment recorded a profit of RM301.780 million from external revenue of RM1,111.803 million. Other segments, combined with interest income and finance costs, reconcile to the consolidated PBT of RM295.079 million.
Financial Health and Cash Flow
Hume Cement’s balance sheet remains robust. As at 30 June 2025, total assets stood at RM1,219.725 million, largely stable compared to RM1,222.112 million last year. Equity attributable to owners saw a healthy increase, rising from RM584.863 million to RM727.914 million, reflecting the year’s profits. This translates to a net asset per share of RM1.00, up from RM0.81.
In terms of cash flow, the Group generated strong net cash from operating activities amounting to RM368.877 million for the financial year, a slight increase from RM363.462 million in the previous year. However, net cash used in investing activities was substantial at RM149.100 million due to placements in short-term deposits, and net cash used in financing activities (RM241.712 million) outpaced cash generated, resulting in a net decrease in cash and cash equivalents for the period. The cash and cash equivalents at the end of the period stood at RM84.905 million.
Dividends: Rewarding Shareholders
Hume Cement has declared and paid a total single-tier dividend of 10 sen per share for the financial year ended 30 June 2025. This is an increase compared to the 8 sen per share paid in the previous financial year (FY2024), demonstrating the company’s commitment to returning value to its shareholders despite the challenging operating environment.
The dividend for FY2025 comprised two interim payments: a first interim dividend of 4.0 sen per share (paid on 18 December 2024) and a second interim dividend of 6.0 sen per share (paid on 24 June 2025).
Prospects and Navigating the Market Ahead
Management remains cautiously optimistic about the future. The Malaysian construction sector is anticipated to maintain a steady growth trajectory, which provides a supportive backdrop for Hume Cement’s core business. The company intends to continue its relentless focus on operational excellence and efficiency improvements to bolster its competitiveness in the market.
Barring any unforeseen circumstances, the Board expects the Group’s performance for the financial year ending 30 June 2026 to be in line with the broader market. This indicates a focus on stable, sustainable growth rather than aggressive expansion.
Summary and Investment Recommendations
Hume Cement Industries Berhad has concluded its financial year with a demonstration of robust profitability, largely driven by astute cost management and efficiency initiatives. While the company faced challenges in sales volume and pricing, its ability to enhance pre-tax and net profits showcases effective internal controls and strategic asset management, including a notable gain from asset disposal.
The increase in total dividends for the year also signals the company’s healthy financial position and its dedication to shareholder returns. As the Malaysian construction sector continues its steady growth, Hume Cement is poised to capitalize on these opportunities, albeit with a watchful eye on market dynamics.
However, investors should also be mindful of several factors:
- The slight dip in revenue for the quarter and year-to-date, primarily due to lower cement selling prices and sales volumes, indicates persistent market competition and pricing pressures.
- The dilution of basic earnings per share despite higher net profit, caused by an increased number of ordinary shares, suggests that future profit growth needs to outpace share issuance or conversion to significantly boost per-share value.
- The higher effective tax rate for the year, due to deferred tax adjustments and the derecognition of deferred tax assets, could impact future net earnings.
- The net decrease in cash and cash equivalents for the year, despite strong operating cash flow, reflects significant investing and financing activities that warrant continuous monitoring.
What Are Your Thoughts?
Hume Cement’s latest report presents a picture of a company actively managing its cost base and optimizing operations in a dynamic market. The increase in dividends is certainly a welcome sign for shareholders.
Do you think Hume Cement can maintain this growth momentum in profitability through continued operational excellence, even if revenue growth remains subdued? How do you view the long-term prospects of the Malaysian construction materials sector?
Share your insights in the comments below! We love to hear your perspectives on these companies.
For more detailed analyses of Malaysian companies, stay tuned to our blog for future updates.
