XL Holdings Bhd (formerly Xian Leng Holdings Bhd) has delivered strong 1Q 4/FY2025 earnings for the period ended July 31, 2024 driven by robust performance across multiple business segments, particularly that of growing crop and merchandise.
The strong financial performance reflects initiatives by the group which primarily engages in the commercial captive breeding of Asian Arowana, stingray and other ornamental fish to drive growth in its new position as a leader in sustainable food security.
In 1Q FY4/2025, XL Holdings’ revenue surged 59.3% year-on-year (yoy) to RM32.02 mil from RM20.10 mil in the corresponding quarter a year ago while its net profit jumped 167.8% to RM3.16 mil from RM1.18 mil previously.
Buoyed by higher sales volumes, the food segment was the largest contributor to XL Holdings’ revenue during the period at RM25.53 mil, marking an 81.2% increase from 1Q FY4/2024 (translated to a pre-tax profit of RM990,000).
Meanwhile, the growing crop segment delivered a strong pre-tax profit of RM3.2 mil despite a 20.9% decline in revenue to RM1.42 mil. The profit was largely due to a significant gain in the fair value of biological assets.
As for the fish farming and merchandise segments, both reported stable performances in 1Q FY4/2025. The merchandise segment recorded RM3.85 mil in revenue and a pre-tax profit of 320,000 while the fish farming segment posted a slight revenue rise of 2% to RM1.27 mil but continued to face challenges with a pre-tax loss of RM630,000.
“Our strong performance in the first quarter reflects the effectiveness of our strategy to drive growth across key segments, particularly in sustainable food production and we remain confident in the potential of our diversified portfolio to continue delivering value,” commented XL Holdings’ executive chairman Stephen Ng Min Lin.
Going forward, the group is confident that its investment in the seaweed business will be another growth driver whereby the full impact can be felt in the coming quarters.
“As part of XL Holdings’ broader sustainability strategy, the seaweed business is projected to offer long-term growth opportunities,” envisages Ng.
“Though the seaweed business is still in its early stages, we are confident in its potential to drive future growth. We expect this segment to begin making meaningful contributions to our earnings in the upcoming quarters.”
Moreover, the seaweed business will also enable XL Holdings to advance its sustainability agenda given it not only supports food security but also plays a significant role in carbon capture.
Very broadly, seaweed cultivation is recognised for its ability to absorb carbon dioxide from the atmosphere and oceans, hence contributing to the reduction of greenhouse gases and enhancing marine biodiversity.
At 10.55am, XL Holdings was up 1.5% or 2.8% to 55 sen with 789,300 shares traded, thus valuing the company at RM240 mil. – Oct 1, 2024
