DSR Taiko Berhad Navigates Challenges with Strategic Vision in Q2 FY2025
Hello fellow Malaysian retail investors!
Today, we’re diving deep into the latest unaudited consolidated financial statements for DSR Taiko Berhad (the Company) for the second half financial period ended 30 June 2025. This report offers a crucial glimpse into the company’s performance and strategic direction as it continues its journey on the LEAP Market. While the report highlights some immediate challenges, it also underscores DSR Taiko’s proactive approach to future growth and market positioning, including an exciting proposed transfer to the ACE Market and a bonus issue.
Let’s break down the numbers and strategic moves that could shape DSR Taiko’s trajectory.
Overall Financial Performance: A Mixed Bag
DSR Taiko Berhad reported a challenging period, with revenue and profit experiencing a downturn in the most recent half-year. However, the full-year picture shows a more nuanced scenario, with robust gross profit growth despite a slight dip in overall revenue.
Second Half (6 Months Ended 30 June 2025 vs. 30 June 2024)
Reporting Period (6 Months Ended 30 June 2025)
- Revenue: RM9,783K
- Gross Profit: RM5,132K
- Profit Before Taxation: RM(618)K (Loss)
- (Loss) / Profit for the Period: RM(1,570)K (Loss)
- (Loss) / Earnings Per Share: (0.37) sen
Comparison Period (6 Months Ended 30 June 2024)
- Revenue: RM11,829K
- Gross Profit: RM6,784K
- Profit Before Taxation: RM3,421K
- (Loss) / Profit for the Period: RM1,949K
- (Loss) / Earnings Per Share: 0.71 sen
For the second half of the financial year ended 30 June 2025, DSR Taiko’s revenue decreased by 17% to RM9.78 million compared to RM11.83 million in the same period last year. This decline was primarily attributed to a lower harvested volume from the company’s matured orchards, with durian harvest reportedly delayed to the first half of the subsequent financial year due to climate change. Consequently, the company recorded a loss before taxation of RM0.62 million, a significant drop from a profit of RM3.42 million in the previous corresponding period, largely due to reduced revenue and higher operating expenses.
Full Year (12 Months Ended 30 June 2025 vs. 30 June 2024)
Reporting Period (12 Months Ended 30 June 2025)
- Revenue: RM17,689K
- Gross Profit: RM11,554K
- Profit Before Taxation: RM1,039K
- (Loss) / Profit for the Period: RM(632)K (Loss)
- (Loss) / Earnings Per Share: 0.03 sen
Comparison Period (12 Months Ended 30 June 2024)
- Revenue: RM18,294K
- Gross Profit: RM11,461K
- Profit Before Taxation: RM4,985K
- (Loss) / Profit for the Period: RM3,195K
- (Loss) / Earnings Per Share: 1.09 sen
On a full-year basis, revenue saw a marginal decrease of 3% to RM17.69 million from RM18.29 million. Despite this, gross profit showed a slight improvement, increasing by 1% to RM11.55 million. However, higher operating expenses significantly impacted the bottom line, resulting in a profit before taxation of RM1.04 million, a 79% decrease from RM4.99 million in the previous financial year.
Segmental Performance: Upstream vs. Downstream Dynamics
A deeper look at the segments reveals shifts in contribution. The Upstream segment, primarily durian cultivation, continues to be the dominant revenue driver but saw a decrease in profit before tax. The Downstream segment, focused on value-added durian products, faces ongoing challenges.
Cumulative 12 Months Ended 30 June 2025
| Segment | Revenue (RM’000) | Revenue (%) | Profit Before Tax (RM’000) |
|---|---|---|---|
| Upstream | 13,062 | 74% | 1,414 |
| Downstream | 4,627 | 26% | (2,646) |
| Investment Holding | – | – | 2,271 |
| Total | 17,689 | 100% | 1,039 |
The Upstream segment accounted for 74% of the total revenue, while the Downstream segment contributed 26%. It’s notable that the Downstream segment reported a loss before tax of RM2.65 million, indicating areas for improvement in this value-added sector. The Investment Holding segment, however, contributed a healthy profit of RM2.27 million to the overall pre-tax profit.
Financial Status: Balance Sheet and Cash Flow
The company’s financial position shows an increase in total assets, primarily driven by property, plant and equipment, but also a rise in liabilities.
Balance Sheet Highlights (As at 30 June 2025 vs. 30 June 2024)
Total Assets grew to RM98,599K from RM90,953K.
Total Equity saw a slight decrease to RM62,943K from RM63,615K.
Total Liabilities increased significantly to RM35,656K from RM27,340K, largely due to higher borrowings.
Net Assets Per Share remained stable at RM0.20.
The increase in non-current assets, particularly property, plant and equipment (RM83.36 million from RM79.03 million), reflects ongoing investments. However, the rise in borrowings (RM28.81 million non-current, RM2.15 million current) indicates increased leverage to fund these activities.
Cash Flow Dynamics (12 Months Ended 30 June 2025 vs. 30 June 2024)
Net Cash From Operating Activities decreased to RM283K from RM6,827K, signaling reduced operational cash generation.
Net Cash For Investing Activities improved to an outflow of RM(7,004)K from RM(9,693)K, indicating less capital expenditure.
Net Cash From Financing Activities turned positive, with an inflow of RM6,009K compared to an outflow of RM(1,704)K, mainly due to drawdowns of borrowings.
The significant drop in cash generated from operations is a key concern, reflecting the impact of lower profits and changes in working capital. The positive cash flow from financing activities helped cushion the overall cash position, but it also highlights the company’s reliance on debt for funding.
Risk and Prospect Analysis: Navigating Climate Change and Expanding Horizons
DSR Taiko is not resting on its laurels despite the current headwinds. The report outlines clear strategies to mitigate risks and capitalize on future opportunities.
Challenges and Strategic Responses
The primary challenge highlighted is the impact of climate change on durian harvesting, leading to delayed yields and lower volumes. This directly affects the Upstream segment’s revenue. Additionally, higher operating expenses across administrative, other, and finance categories have compressed profit margins.
To address these, DSR Taiko is committed to:
- Strengthening its presence in key overseas markets: Particularly China, Taiwan, Hong Kong, and Singapore, alongside local market expansion. This diversification aims to reduce reliance on domestic market fluctuations.
- Expanding its durian plantations: Continually looking for mature orchards to support downstream product expansion and demand.
- Value-added products: Upholding its maxim of turning commodities into value-added products, advancing from trading to branding and from local to global, while championing Safety, Originality, and Quality (SOQ) products. This is crucial for the Downstream segment’s profitability.
- Technological Advancement: Ongoing investments in digitalization, IoT integration, and supply chain optimization to enhance efficiency, resilience, and scalability.
- Responsible Business Practices: Embedding environmental, social, and governance (ESG) initiatives.
Corporate Proposals: A Leap Towards the ACE Market
A significant development is the proposed transfer from the LEAP Market to the ACE Market. This move, along with a proposed bonus issue of 5 bonus shares for each existing share, is intended to:
- Enhance the company’s visibility and profile.
- Improve liquidity for shareholders.
- Broaden the investor base beyond sophisticated investors, as the ACE Market allows broader retail participation.
These corporate exercises are strategic steps to unlock greater shareholder value and position DSR Taiko for more robust growth and recognition.
Summary and Investment Recommendations
DSR Taiko Berhad’s Q2 FY2025 report presents a picture of a company facing immediate operational challenges, primarily due to climate-impacted harvests and increased expenses. The dip in profit before taxation for both the half-year and full-year periods reflects these pressures. However, it’s crucial to look beyond just the immediate numbers.
The company’s strategic focus on expanding into international markets, investing in value-added products, enhancing operational efficiency through technology, and committing to ESG principles demonstrates a clear vision for long-term sustainable growth. The proposed transfer to the ACE Market and the bonus issue are significant moves that could dramatically alter the company’s market perception and investor appeal, offering improved liquidity and a broader investor base.
While the immediate financial performance indicates headwinds, the forward-looking strategies aim to build resilience and unlock future value. Investors should consider these strategic initiatives and the potential long-term benefits as the company transforms its market presence and operational capabilities.
Key areas to monitor include:
- The successful execution of overseas market expansion plans and their impact on revenue diversification.
- The turnaround of the Downstream segment’s profitability through value-added product strategies.
- The effectiveness of digitalization and IoT in improving operational efficiency and mitigating climate-related risks.
- The completion and impact of the proposed ACE Market transfer and bonus issue on shareholder value and market liquidity.
DSR Taiko Berhad is at a pivotal juncture. While the recent financial performance suggests a period of adjustment, its strategic initiatives for global expansion, product innovation, and market upgrading paint a promising long-term picture. The transition to the ACE Market, in particular, could be a game-changer for its visibility and investor base.
What are your thoughts on DSR Taiko’s strategic pivot towards international markets and value-added products, especially in light of the proposed ACE Market transfer and bonus issue? Do you believe these moves will significantly boost investor confidence and long-term shareholder value?
Share your views in the comment section below!
Stay tuned for more analyses of Malaysian companies.
