ARB IOT (ARBB) H2 2024 earnings summary

Executive summary

• Revenue for the year ended June 30, 2024, declined 76% year-over-year to RM58.2 million ($12.3 million), with a net loss of RM54.7 million ($11.6 million) compared to a profit of RM27.5 million ($5.9 million) in the prior year.

• The company shifted its IoT Smart Agriculture business model from one-off sales to recurring income, impacting short-term revenue but aiming for more consistent future income.

• The IoT Gadget Distribution business was disposed of in October 2023 due to insignificant profit generation.

• ARB Berhad reduced its ownership to 28.38% following a distribution of shares in February 2024, ending the company's status as a controlled company.

Financial highlights

• Revenue dropped from RM242.1 million ($51.9 million) in FY2023 to RM58.2 million ($12.3 million) in FY2024.

• Gross loss for FY2024 was RM20.3 million ($4.3 million), compared to a gross profit of RM49.9 million ($10.7 million) in FY2023.

• Total expenses increased 62.4% year-over-year to RM46.8 million ($9.9 million), mainly due to higher depreciation and amortization.

• Cash and bank balances as of June 30, 2024, were RM33.4 million ($7.1 million).

• Basic and diluted EPS for FY2024 was a loss of RM2.08 per share, compared to earnings of RM1.17 per share in FY2023.

Outlook and guidance

• Management expects the new recurring revenue model in IoT Smart Agriculture to provide more stable and staggered revenue streams in the future.

• The company plans to expand its IoT business in the ASEAN region, with a focus on establishing a regional center in Singapore and sales offices in major ASEAN cities.