28 Apr 2025 PGF Capital logs highest quarterly profit in eight years on impairment loss reversal

Source: https://theedgemalaysia.com/node/753280

KUALA LUMPUR (April 28): Penang-based insulation products maker PGF Capital Bhd has recorded its highest quarterly net profit since 2017, driven by a reversal of impairment loss and the absence of a one-off reversal of a grant to deferred income.

The company posted a net profit of RM13.91 million for the fourth quarter ended Feb 28, 2025 (4QFY2025), compared to a net loss of RM1.83 million a year earlier. This is the highest quarterly net profit since 4QFY2017 when PGF logged an RM32 million net profit.

Revenue rose slightly by 1.04% year-on-year to RM33.69 million from RM33.34 million, the company’s bourse filing on Monday showed.

PGF has proposed a final dividend of one sen per share. This follows the earlier distribution of an interim dividend of two sen, bringing the total dividend payout for FY2025 to three sen per share, amounting to RM5.8 million in total.

PGF said the reversal of impairment loss on land held for property development amounted to RM19.60 million. It also noted that there was a one-off reversal of a grant to deferred income amounting to RM5.76 million previously.

But this was partly offset by the expenses incurred for new banking facilities secured by a new subsidiary company amounting to RM1.55 million. The company also incurred a mark-to-market unrealised loss of RM2.27 million on a cross-currency swap resulting from the drawdown of the said facilities.

For the full financial year, PGF Capital’s net profit jumped by over threefold to RM33.94 million — its highest annual net profit since 2017 — from RM10.46 million in FY2024. Revenue hit a record high of RM155.02 million, a 20.5% increase from RM128.64 million in FY2024.

Looking ahead, PGF Capital group CEO Fong Wern Sheng said he expects the insulation segment — which contributed 99.23% of the group’s total revenue in FY2025 — to continue its strong performance and remain a key driver of earnings in FY2026, particularly in the robust Australian market, fuelled by proactive government initiatives such as building code revisions and ambitious new home construction targets.

“The recent decision by the Victorian state government in early April 2025 to significantly reduce the cost of insulation upgrades under the Victorian Energy Upgrades (VEU) programme, commencing next year, is expected to further amplify demand for our solutions in Victoria, Australia’s most populous state. We are well positioned to capitalise on these favourable market dynamics,” he said in a statement.

Apart from insulation, the company is also involved in property development and investment holding segments.

Simultaneously, Fong said the company sees considerable potential in the domestic market, driven by the recent implementation of the Energy Efficiency and Conservation Act 2024, which is expected to stimulate increased demand for its energy-efficient insulation products.

“Furthermore, the new mineral wool sandwich panels, designed for industrial and commercial buildings and currently nearing certification with Sirim and Bomba, hold great promise. Their exceptional thermal performance positions them well to contribute meaningfully to our future revenue and profitability upon successful completion of the certification process,” Fong said.

“Our capacity expansion plans are progressing well with the construction of our new 40,000 metric tonne plant in Kulim East Industrial Park, Kedah, expected to commence soon. Commercial operations are slated to begin in the first half of 2026. It has recently been granted the Northern Corridor Economic Region (NCER) Tax Incentive Package for a 5 plus 5 years corporate tax holiday upon achieving profitability. We are confident this will contribute positively to our future profitability,” he added.

At Monday’s closing bell, shares of PGF Capital were up seven sen or 4.27% at RM1.71, giving the company a market capitalisation of RM318.1 million. Year-to-date, the stock has fallen over 20%.

Edited ByS Kanagaraju