Jawala Inc. FY2025 Unaudited Financial Results: Revenue Growth, Losses, and No Dividend Declared

Jawala Inc. FY2025 Financial Review: Navigating Adverse Market Conditions

Jawala Inc., a Malaysia-based forest resource company listed on the Singapore Exchange (Catalist Board), has released its unaudited financial statements for the six months and full year ended 31 July 2025. The Group primarily manages industrial tree plantations and focuses on sustainable forestry operations in Sabah. Here, we analyze the key financial metrics, performance trends, and noteworthy corporate events impacting the Group.

Key Financial Metrics and YoY / QoQ Comparison

Metric	2H FY2025	1H FY2025	2H FY2024	YoY Change (2H)	QoQ Change
Revenue (RM’000)	2,670	7,514	8,012	-67%	-64%
Net Profit/(Loss) (RM’000)	(1,098)	(2,377)	852	NM	+54%
EPS (Sen per share)	(0.74)	(1.46)	0.42	NM	+49%
Dividend (Sen per share)	0	0	0	No Change	No Change
Net Asset Value/Share (RM)	0.27	–	0.29	-7%	–

Historical Performance Trends

Revenue: For the full year FY2025, revenue increased by 25% to RM10.2 million (FY2024: RM8.2 million), primarily due to higher logging activity in 1H FY2025. However, revenue plummeted 67% in 2H FY2025 versus 2H FY2024 due to management’s decision to delay logging and production operations amid adverse market and weather conditions.
Profitability: Despite the YoY revenue increase, Jawala posted a net loss of RM3.5 million for FY2025, a 30% increase in losses compared to FY2024 (net loss RM2.7 million). EPS declined to -2.20 sen (FY2024: -1.77 sen).
Gross Profit Margin: Remained stable at 32% for FY2025 versus FY2024.
Net Asset Value: Decreased to RM0.27 per share (FY2024: RM0.29), reflecting accumulated losses and lower asset revaluation.

Exceptional Earnings, Expenses, and Asset Revaluation

Fair Value Gain on Biological Assets: RM1.86 million in FY2025, down 68% YoY due to changes in assumptions reflecting weaker market conditions and a revised valuation approach.
Finance Expenses: Increased substantially to RM637,000 as FPD loan interest was expensed rather than capitalized, impacting bottom-line losses.
Impairment Reversal: Collection from debtors led to a RM268,000 reversal of impairment on trade receivables in FY2025, compared to a RM1.4 million impairment loss in FY2024.

Directors’ and Key Management Remuneration

Total Directors’ Remuneration: RM695,000 in FY2025 (slightly lower than RM741,000 in FY2024).
Other Key Management: RM487,000 in FY2025 (FY2024: RM532,000).

Related-Party Transactions

Biological assets expenses: RM2.72 million incurred with related parties.
No significant purchases, rental income, or general mandate for interested person transactions disclosed for FY2025.

Dividend Policy and Updates

No dividend declared or recommended for FY2025 or FY2024. The Board cited continued losses as the reason for withholding dividends.

Macroeconomic and Industry Trends

Timber exports from Sabah dropped 19% in volume and 24% in value (Jan–Jun 2025 vs. Jan–Jun 2024), driven by inflation, higher tariffs, and global uncertainty.
Cost pressures and weak market conditions prompted Jawala to delay logging and production activities in 2H FY2025, directly impacting revenue and cash flows.

Liquidity, Cash Flow, and Balance Sheet Highlights

Net cash used in operating activities: RM1.4 million outflow due to net losses and non-cash adjustments.
Net cash used in investing activities: RM8.6 million, primarily attributable to new biological assets and infrastructure.
Net cash provided by financing activities: RM3.4 million, mainly from drawdowns of loan facilities from Forest Plantation Development Sdn. Bhd.
Cash and cash equivalents: RM2.4 million at year-end, down sharply from RM8.9 million in FY2024.
Borrowings: Increased to RM21.8 million from RM17.8 million, with new loans to support plantation activities.

Chairman’s Statement

“The Department of Statistics, Sabah shows that exports of timber products from Sabah for January to June 2025 recorded a decrease of 19% in volume and 24% in value respectively against January to June 2024. Market condition remains challenging due to escalating costs as a result of inflationary pressure and uncertainties from higher tariffs worldwide.”

Tone: Cautious and negative, focusing on external headwinds and their impact on the business.

Events Impacting Future Performance

Adverse market and weather conditions led to strategic delays in logging/production, impacting near-term cash flows and revenue.
No dividend planned due to ongoing losses.
Macroeconomic uncertainties (inflation, global tariffs) likely to continue pressuring costs and demand in the next 12 months.
No significant corporate actions, asset sales, or restructuring reported.

Conclusion and Investment Recommendations

Overall Assessment: Jawala Inc.’s FY2025 results reflect a weak financial performance, with increasing losses, declining cash reserves, and challenging industry conditions. The company’s strategic decision to delay logging and production in response to external pressures has resulted in a sharp drop in revenue for 2H FY2025 and no dividend for shareholders. The outlook is clouded by continued macroeconomic headwinds, rising costs, and sluggish demand for timber exports.

If Currently Holding: Investors may consider reducing exposure or exiting positions unless they have a long-term view and confidence in a turnaround in market conditions and company strategy. The lack of dividends and negative earnings momentum are clear warning signs.
If Not Holding: Caution is advised. Prospective investors may wish to avoid entering until there is evidence of market stabilization, improved cash flows, and a return to profitability. Monitoring for early signs of industry recovery or strategic shifts by management is prudent.

Disclaimer: This analysis is based solely on the financial report provided and does not constitute investment advice. Readers should conduct further due diligence and consider their own financial circumstances and risk profile before making any investment decisions.