Riverstone (AP4) Q1 2025 earnings summary

Executive summary

• Revenue for 1Q FY2025 increased by 1.1% year-over-year to RM252.3 million, driven by higher healthcare glove volumes and stable cleanroom demand, but gross profit declined by 15.7% due to higher cost of sales, resulting in a lower gross margin of 32.6% compared to 39.1% in 1Q2024.

• Net profit for 1Q FY2025 was RM56.4 million, down 21.8% year-over-year, impacted by higher raw material costs, FX losses, and a shift to generic healthcare gloves.

• Interim dividend of 3.0 sen per share declared for 1Q FY2025, down from 4.0 sen in 1Q2024, representing a 78.7% payout ratio and a 4.0% annualized yield.

• Riverstone Holdings Ltd specializes in high-tech cleanroom gloves, premium healthcare gloves, and cleanroom consumables, serving electronics, semiconductor, and healthcare sectors.

• Operates manufacturing and sales sites in Malaysia, China, Thailand, and the Philippines, with a diversified group structure.

Financial highlights

• Cost of sales rose 11.9% to RM170.1 million, outpacing revenue growth, while gross profit for 1Q FY2025 was RM82.2 million, a 15.7% decrease year-over-year.

• Net profit for 1Q FY2025 was RM56.4 million, down 21.8% year-over-year and 19.4% sequentially.

• Operating cash flow for 1Q FY2025 was RM56.0 million; cash and cash equivalents increased to RM759.6 million as of 31 March 2025.

• Other income decreased by 23.9% to RM5.9 million, mainly due to lower interest income.

• Diluted EPS was 3.81 sen, down 21.8% year-over-year.

Outlook and guidance

• The business faces ongoing challenges from price competition, currency fluctuations, volatile raw material prices, and increased production costs.

• Management is monitoring the potential impact of US tariffs and exploring risk mitigation strategies.

• Cautiously optimistic on healthcare volume growth and resilient cleanroom demand, with three new healthcare production lines to be commissioned in 2HFY25.

• Focus remains on transitioning to higher-value specialty solutions and ESG improvements.

• Targets further reductions in water and electricity usage, waste, and emissions through ongoing and future projects.