Riverstone Holdings Limited: 2Q2025 & 1H2025 Financial Analysis

Riverstone Holdings Limited, a leading manufacturer and distributor of gloves and related consumables, has released its condensed interim consolidated financial statements for the second quarter and six months ended 30 June 2025. Below, we analyze the key financial metrics, year-over-year and quarter-over-quarter performance, dividend announcements, segmental breakdowns, and other notable disclosures relevant for investors.

Key Financial Metrics

*Declared for 2Q2025, payable date to be determined.

Historical Performance Trends

Riverstone’s financials show a decline in both top-line and bottom-line performance compared to the previous year and the prior quarter. Revenue for 2Q2025 was marginally lower YoY (-0.8%) and declined 3.0% from the preceding quarter. Net profit fell sharply by 37.4% YoY and 19.6% QoQ, reflecting margin pressure and higher cost of sales.

Income Statement Overview

• Revenue: 2Q2025 revenue was RM244.8 million, a slight decrease from RM246.9 million YoY and down from RM252.3 million in 1Q2025. For 1H2025, revenue remained flat at RM497.1 million versus RM496.4 million in 1H2024.
• Cost of Sales: Increased significantly to RM179.1 million in 2Q2025, up 21.3% YoY, resulting in a lower gross profit margin of 26.8% (from 40.2% YoY).
• Net Profit: Dropped to RM45.4 million for the quarter, and to RM101.8 million for 1H2025 (from RM144.7 million in 1H2024), reflecting higher costs and reduced profitability.
• EPS: Earnings per share declined from 4.89 sen in 2Q2024 to 3.06 sen in 2Q2025.

Dividends

• Dividend Declared: The Board proposed an interim, tax-exempt dividend of 2.50 sen per share for 2Q2025, down from 4.00 sen per share in the same period last year and 3.00 sen in the previous quarter.
• Total Dividends for 1H2025: Special interim (4.00 sen), final (8.00 sen), and interim (3.00 sen), totaling RM222.3 million paid in 1H2025 (versus RM244.6 million in 1H2024).

Balance Sheet and Cash Flow

• Cash and Cash Equivalents: Decreased to RM602.3 million as at 30 June 2025, down from RM715.1 million at year-end 2024, primarily due to dividend payments and capital expenditure.
• Inventories and Receivables: Inventories declined to RM96.5 million (from RM98.2 million), and trade receivables decreased to RM153.1 million (from RM178.2 million), reflecting improved collections and higher sales volumes.
• Net Assets: Group net assets fell to RM1,455.9 million (from RM1,576.9 million at end-2024).
• Operating Cash Flow: Net cash from operations was RM150.6 million for 1H2025, offset by RM26.9 million in investing outflows and RM222.6 million in financing outflows (mainly dividends).

Segmental Performance

• Geographical Segments: Malaysia remains the core revenue generator, with some contribution from Thailand, China, and Singapore. All regions showed flat or declining performance compared to the previous year, consistent with overall group trends.
• Business Segments: The Group’s revenue is predominantly from gloves, with non-glove consumables being a minor segment.

Exceptional Items and Related Party Transactions

• Other Operating Income: The quarter saw a turnaround from RM0.8 million in other operating expenses in 2Q2024 to RM0.2 million in other income in 2Q2025, driven mainly by gains on disposal of property, plant and equipment.
• Related Party Transactions: Minor transactions for repair, maintenance, and plant/equipment purchases with related parties were disclosed. No material unusual or exceptional items were reported.

Directors’ Remuneration

• Directors and key management received RM5.7 million in total compensation in 1H2025 (vs. RM6.3 million in 1H2024), including fees, short-term benefits, CPF contributions, and performance incentives.

Chairman’s Statement and Management Commentary

The Chairman’s review and management commentary adopt a cautious tone, highlighting pressures from price competition, currency fluctuations, volatile raw material prices, and increased production costs. The company is monitoring the potential impact of US tariffs and is exploring risk mitigation strategies. The decrease in profit and margins is attributed to these external challenges and higher operating costs.

Events and Outlook

• No major legal disputes, asset revaluations, or restructuring events were reported.
• No share buybacks or new issuances in the reporting period.
• No significant one-off gains or losses, other than minor asset disposals.
• Management signals caution for the next 12 months, given the ongoing challenging environment.

Conclusion

Riverstone Holdings Limited’s financial performance for 2Q2025 and 1H2025 reflects a period of margin compression and profit decline, despite stable revenues. Rising costs, especially in raw materials and production, have pressured profitability. The company continues to generate strong operating cash flows and maintains a robust balance sheet, but the outlook is cautious due to industry headwinds and macroeconomic uncertainties. Dividend payouts have been reduced in line with lower earnings. Overall, the performance and outlook appear neutral to weak, as management focuses on navigating a highly competitive and volatile market environment.

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