Annica Holdings Limited: 3Q2025 and 9M2025 Financial Results Review

Annica Holdings Limited released its unaudited condensed interim consolidated financial statements for the third quarter and nine months ended 30 September 2025. The report reveals significant year-over-year (YoY) declines across key financial metrics, driven by lower sales orders in its core integrated engineering solutions segment and challenges across both operational segments. This review summarizes the main financial highlights, performance trends, corporate actions, and provides guidance for investors.

Key Financial Metrics and Performance Comparison

*The report does not disclose 2Q2025 figures; thus, QoQ comparisons are not available.

Historical and Trend Analysis

• Revenue: For 9M2025, revenue was S\$4,995,000, down 35% YoY from S\$7,633,000 in 9M2024. The decline is attributed to fewer sales orders within the integrated engineering solutions segment. Gross profit also fell 33% YoY for the nine-month period.
• Profitability: The group swung from a net profit of S\$573,000 in 3Q2024 to a net loss of S\$858,000 in 3Q2025. Likewise, for the nine months ended, net loss increased from S\$196,000 (9M2024) to S\$1,603,000 (9M2025).
• EPS: Earnings per share moved from positive in 3Q2024 to negative in 3Q2025, reflecting the group’s loss-making position.
• Gross Margins: Gross margin remained high (70% in 3Q2025, 71% in 3Q2024), but the absolute profit fell due to lower revenue.

Balance Sheet and Cash Flow Highlights

• Assets: Non-current assets increased by S\$3.1 million due to additions of property, plant, and equipment (PPE) and right-of-use (ROU) assets, primarily from asset acquisition activities.
• Current Assets: Decreased by S\$994,000, mainly from lower cash and trade receivables, partially offset by an increase in inventories related to ongoing projects.
• Working Capital: Negative working capital worsened from S\$2.2 million at year-end 2024 to S\$4.4 million as at 30 September 2025, mainly due to reclassification of receivables to PPE following asset settlement arrangements.
• Cash Flows: Net cash from operating activities in 3Q2025 was only S\$18,000 (vs. S\$862,000 in 3Q2024). For 9M2025, net operating cash inflow was S\$462,000, down from S\$959,000 in 9M2024, reflecting weaker underlying profitability.

Corporate Actions and Capital Structure

• Share Issuance: In June 2025, the company issued 1.77 billion new shares to acquire assets in Malaysia, raising share capital to S\$73.2 million and increasing total shares outstanding to over 21 billion.
• Employee Share Option Scheme: 30 million ESOS options remain outstanding, representing 0.14% of shares in issue, but none have been exercised to date.
• Divestments and Disposals: The proposed sale of a subsidiary (IES) fell through as the purchaser did not fulfil obligations. The company is reviewing its legal options.
• Fundraising and Investor Mandates: Comfort letters from potential investors indicate possible capital injection of up to S\$2 million, but this has yet to materialize.

Exceptional Items and Non-Recurring Events

• Settlement of Receivables: The company settled amounts due from GPE Power Systems and Chong Shin Mun via asset transfers, ceasing interest income from these receivables.
• Foreign Exchange: FX gains and losses were significant contributors to other income and expenses, with higher unrealized gains in 9M2025 partly offsetting operational losses.

Chairman’s Statement

“On behalf of the Board of Directors of the Company, we, the undersigned, hereby confirm that, to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the unaudited condensed interim consolidated financial statements of the Group for the third quarter and nine-month financial period ended 30 September 2025 to be false or misleading in any material aspect.”

Sandra Liz Hon Ai Ling, Executive Director and CEO
Tan Sri Dato Seri Zulkefli Bin Ahmad Makinudin, Independent and Non-Executive Chairman

The tone is neutral and procedural, without positive or negative commentary on performance or prospects.

Events and Risks Affecting the Business

• Macroeconomic Headwinds: The report notes regional energy sector growth, but with rising costs, delays in oil & gas contracts, and supply chain risks affecting renewables. Customers are seeking cost-effective, resilient providers, favoring regional players.
• Operational Restructuring: The group has focused on localizing sourcing, controlling costs, and disposing of non-core assets to strengthen liquidity.
• Legal and Transactional Risks: The failed disposal of IES introduces uncertainty and potential legal costs.
• Capital Raising: The company is considering fundraising, acquisitions, and restructuring to drive future growth.

Dividend Policy

No interim or final dividends have been declared or recommended for 3Q2025 or 9M2025, consistent with prior periods due to the group’s loss-making position.

Conclusion and Investment Recommendations

Performance and Outlook:
Annica Holdings Limited’s financial performance for the third quarter and nine months of 2025 is weak, with significant declines in revenue, profit, and cash flow generation. The company faces ongoing margin pressures, a challenging macroeconomic environment, negative working capital, and high reliance on asset reclassifications and external fundraising to sustain operations. While management is taking steps to localize sourcing, control costs, and explore new capital, there are no signs of imminent turnaround or return to profitability.

• If you are currently holding Annica Holdings shares: Consider reviewing your position critically. The company’s weak financials, lack of dividend, and operational uncertainties suggest caution. Current holders may wish to reduce exposure, or hold only if they believe management’s restructuring and capital raising efforts will deliver a turnaround. Monitor for concrete improvement before increasing exposure.
• If you are not holding Annica Holdings shares: It is advisable to remain on the sidelines until there is evidence of sustainable earnings recovery, positive cash flows, and successful execution of restructuring or fundraising initiatives. The risk-reward profile is currently unattractive for new investment.

Disclaimer:
This analysis is based solely on the financial report disclosed by Annica Holdings Limited as at 30 September 2025. It does not constitute investment advice or a recommendation to buy or sell securities. Please consult with your financial advisor and consider your individual circumstances and risk tolerance before making investment decisions.

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