Polaris Ltd. 1H 2025 Financial Results: Strategic Refocus Drives Near-Breakeven Performance

Polaris Ltd., a Singapore-listed investment holding company with operations in pre-loved luxury goods, consumer electronics, and green protein, has released its unaudited condensed interim consolidated financial statements for the six-month period ended 30 June 2025. The Group’s latest results reflect significant strategic shifts, including an exit from its customer service business and a renewed focus on its core pre-loved luxury segment across Asia.

Key Financial Metrics and Performance Highlights

Segmental Performance

• Pre-loved Luxury Goods: Revenue rose to S\$7.7 million from S\$6.9 million YoY, but segment loss was S\$0.3 million versus a small profit last year. Expansion into new markets and collaborations with pawn institutions are underway.
• Consumer Electronics: Revenue fell to S\$3.5 million (from S\$4.1 million YoY), reflecting weaker corporate demand in Singapore. Segment profit was S\$49,000 versus S\$13,000 last year.
• Green Protein: Revenue fell to S\$9,000 (from S\$205,000), with a segment loss of S\$65,000.
• Customer Services: Business exited as of September 2024, with no revenue contribution in 1H 2025.

Exceptional Items and Related-Party Transactions

• Exceptional Gain: S\$730,000 gain from sale of fixed assets (office units) contributed to the surge in other income and helped bring the Group to near-breakeven.
• Related-Party Transactions: S\$43,894 in consumer electronics sales to related parties, conducted on normal commercial terms.

Balance Sheet and Cash Flow Review

• Total Assets: Down to S\$6.5 million (from S\$7.7 million at end 2024), mainly due to sale of office units and lower receivables.
• Total Liabilities: Reduced to S\$2.4 million (from S\$3.5 million), mainly due to significant repayment of bank loans.
• Cash and Equivalents: Improved to S\$1.8 million (from S\$0.8 million at end 2024), with positive operating cash flow of S\$0.3 million and S\$2.0 million inflow from asset sales.
• Working Capital: Increased to S\$3.6 million (from S\$2.8 million).

Dividends

No interim dividend was declared for the current or previous periods as the Group is conserving cash for working capital needs. This is in line with the Group’s current financial strategy.

Corporate Actions and Strategic Developments

• Divestment: Exit from customer service business and sale of office units, freeing up capital and reducing costs.
• Expansion: Plans to establish a Vietnam subsidiary (80% interest) to expand pre-loved luxury trading in Southeast Asia.
• No Share Buybacks or Dilution: No changes in share capital, treasury shares, or subsidiary holdings; no outstanding convertibles.

Management Commentary and Outlook

Management’s Tone: The management commentary is cautiously optimistic. The Group highlights its strategic refocus, cost discipline, and successful asset sales as drivers for improved results, while also noting ongoing expansion in the pre-loved luxury segment and diversification into coffee machine trading. The outlook is neutral to slightly positive, with no expectation of major changes in the competitive landscape or adverse macro trends in the next 12 months.

Chairman’s Statement

“As at the date of this announcement, the Group does not anticipate any significant changes in the competitive landscape of the consumer electronics segment within the upcoming reporting period and the following 12 months that would materially impact the Group. During the forthcoming reporting period, the consumer electronics segment will be influenced by global corporate pricing strategies implemented by the Group’s key partners and international trade tariffs. While the mobile phone segment remains a core component, the Group has also initiated diversification into coffee machines targeting both new and pre-owned units, with trading arrangement launched in Singapore and soon for pre-owned coffee machines in Thailand. This move is in line with evolving consumer preferences toward premium home appliances and experiential living.

The pre-loved luxury goods market continues to gain strong momentum across Asia, propelled by increasing demand for sustainable consumption, growing fashion awareness among Gen Z and millennial consumers, and the rapid expansion of digital resale platforms. In line with these trends, the Group remains focused on strengthening its presence in the pre-loved luxury segment through strategic expansion across key Southeast Asian markets – Indonesia, the Philippines, Thailand, and Vietnam, the newly targeted market.

To further enhance both revenue and profitability in this segment, the Group is actively expanding its pre-loved business, leveraging strategic collaborations with pawn institutions. This synergy aims to broaden product sourcing capabilities while building trust with consumers through transparent authentication and valuation processes.”

Conclusion and Investment Recommendation

Overall Assessment: Polaris Ltd. has demonstrated a significant turnaround, achieving near-breakeven results after a period of losses, largely due to strategic cost reductions, asset sales, and a renewed focus on its core pre-loved luxury goods business. The balance sheet has strengthened with lower debt and improved liquidity. However, core operating profitability remains weak, and future growth will depend on successful market expansion and execution of its diversification plans.

• If you currently hold the stock: Consider maintaining your position if you are comfortable with moderate risk and wish to benefit from potential upside in the pre-loved luxury segment and Southeast Asian expansion. However, remain vigilant for future updates on operating profitability and execution risks as the business transformation continues.
• If you do not currently hold the stock: It may be prudent to monitor the Group’s next one or two reporting periods for evidence of sustained profitability from core operations (excluding exceptional gains) before considering entry, especially given the still-low margins and lack of dividend yield.

Disclaimer: This analysis is based solely on information disclosed in Polaris Ltd.’s published interim financial statements and does not constitute investment advice. Investors should consider their own financial circumstances and seek independent advice before making any investment decisions.

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