Advanced Holdings Ltd: 1H2025 Financial Results Analysis

Advanced Holdings Ltd has released its unaudited condensed consolidated interim financial statements for the six months ended 30 June 2025. The company, listed on the Singapore Exchange, operates primarily in agri-technology (Agri-Tech), with a significant presence in Indonesia via its corn processing activities. Recent divestments have led to the cessation of its Engineering Service and Manufacturing (ESM) segment.

Key Financial Metrics and Performance Summary

Historical Performance Trends

• Revenue: Grew 61% YoY, driven by increased production at the Indonesian corn drying facility.
• Gross Margin: Remained negative, but the loss narrowed to \$(191)K from \$(317)K YoY as the facility scaled up.
• Net Loss: Increased to \$(2.29)M from \$(2.01)M due to higher FX losses and insufficient production volume to cover fixed costs.
• Net Asset Value: Declined due to continued losses and weakening of the Indonesian Rupiah.

Exceptional Items and One-Offs

• Foreign Exchange Losses: Major contributor to “Other Losses” of \$931K, primarily due to IDR/SGD and USD/SGD fluctuations affecting intra-group loans and cash balances.
• Discontinued Operations: The Company’s ESM segment (via CAEKSA) was divested in November 2024, resulting in a one-off loss from discontinued operations of \$342K in 1H2024. No such loss in 1H2025.
• Inventory Write-downs: Some finished inventories were sold at steep discounts due to damage from extended storage at port depots.

Dividends

No dividend was declared for 1H2025, consistent with the previous year and quarter, as the Group remains loss-making.

Balance Sheet and Cash Flow

• Cash & Bank Balances: Decreased from \$27.1M to \$25.5M, mainly due to operational losses and repayment of bank borrowings.
• Net Working Capital: Remains healthy at \$27.0M, though down from \$28.5M at 2024 year-end.
• Debt: Total liabilities decreased to \$7.9M, with successful repayment of \$0.6M in bank borrowings during the period.

Corporate Actions and Strategic Developments

• Divestment: Fully exited the ESM segment with the sale of CAEKSA, focusing on agri-tech.
• Share Buybacks/Dilution: No new issuance, buybacks, or dilution. Treasury shares unchanged at 2.2% of issued shares.
• Related Party Transactions: No disclosable transactions or general mandate for interested person transactions in 1H2025.
• Asset Impairments: The Group and Company remain fully impaired on their 12.25% stake in Agricore Global Pte Ltd.

Macroeconomic, Sector, and Operational Risks

• Supply Chain Risk: Corn supply was disrupted as farmers in North Sulawesi switched to more profitable Patchouli crops due to a price surge. Patchouli prices have since reverted, but this affected raw material availability and production volumes.
• Currency Risk: Exposure to IDR and USD led to significant unrealized FX losses.
• Government Policy: Indonesia’s reduction in subsidized corn seed supply (from 2M to 300K hectares) could impact local corn production and future raw material costs.
• Demand Outlook: Demand for corn remains strong, supported by food security initiatives and livestock feed demand. However, short-term supply challenges persist.
• Contingent Liabilities: The Group has provided a warranty relating to past project contracts in Saudi Arabia (up to SGD1.69M), with collections still ongoing.

Chairman’s Statement

The report does not include a dedicated Chairman’s Statement, but the Management commentary provides a cautious tone. The Group notes challenging supply conditions due to crop switching by farmers and currency volatility. While demand for corn remains strong, the outlook is tempered by uncertainties in raw material supply, FX risks, and government policy shifts.

Directors’ Remuneration

No specific figures on directors’ pay are disclosed in this report.

Forecast and Outlook

• Management expects corn demand in Indonesia to remain robust, supported by new government initiatives and food security programs.
• Supply-side risks remain until government subsidies and price supports are restored and operational collaborations with local farmers take effect.
• The Group is actively working with local governments and farmer groups to increase corn planting area and secure more raw materials.

Conclusion and Investment Recommendation

Overall, the Group’s performance remains weak, with continued net losses, negative gross margins, and ongoing supply and currency headwinds. While its balance sheet is still healthy and the Group is well-capitalized, the operational turnaround depends on external factors such as corn supply, currency stabilization, and government support.

• If you are currently holding the stock: Consider maintaining a cautious hold. The strong balance sheet and net working capital offer some downside protection, but persistent losses and operational uncertainties warrant vigilance. Monitor for improvements in corn supply, FX stability, and successful execution of the Group’s upstream initiatives before increasing exposure or averaging down.
• If you are not holding the stock: It is prudent to stay on the sidelines until the Group demonstrates a return to profitability or substantial improvement in gross margins and operational cash flow. Wait for clear evidence of supply normalization and margin recovery, as well as reduced FX volatility, before considering an entry.

Disclaimer: This analysis is based strictly on the company’s published financial statements and does not constitute investment advice. Investors should consider their own financial situations and conduct additional due diligence before making investment decisions.

View Advanced Historical chart here