ISDN Holdings Reports Robust Growth in 9M2025: Automation and Clean Energy Expansion Drive Results

Key Financial Highlights (9M2025)

• Group Revenue: S\$319.8 million, up 21.9% year-on-year.
• Gross Profit: S\$77.6 million, up 13.6% YoY; gross profit margin at 24.3%.
• Core Profits (excluding unrealised FX losses): S\$6.6 million, up 57.5% YoY.
• Profit after Tax: S\$8.5 million, up 11.6% YoY.
• Net Income: Down 2% YoY due to large non-cash, foreign exchange-related revaluations.
• Operating Expenses: S\$54.7 million, up 5.7% YoY, indicating disciplined cost control despite revenue growth.
• Net Profit Margin: 2.6%, down slightly from 2.9% as a result of FX losses.

Business Segment Performance

Industrial Automation

• Represents 86.5% of group revenue.
• Segment revenue grew 8.6% YoY, with:
  • 6.3% growth in China
  • 14.7% growth in Southeast Asia
• Growth drivers include:
  • Continued upgrading of manufacturing automation in Asia, especially China and Southeast Asia.
  • Shift towards in-region suppliers as companies seek supply chain resilience.
  • Manufacturers increasing automation to offset global supply chain costs and tariffs.
  • Demographic shifts leading to a slowing or declining manufacturing labor force.
• ISDN has evolved its offerings beyond servo motor components to advanced manufacturing modules, equipment solutions, IoT/cloud software, and AI.

Renewable Energy (Hydropower)

• Accounts for 13.5% of group revenue.
• Revenue increased to S\$43.1 million from S\$7.7 million YoY, a remarkable 456.3% growth.
• Growth driven by construction revenue from two new mini-hydropower plants (Lau Biang 2 and 3) and recurring income from three operational plants.
• Two new plants are scheduled for completion by 2026, expected to boost total capacity by 81.3% and further strengthen recurring income and market position in the clean energy sector.

Shareholder-Sensitive and Price-Moving Information

• Non-cash FX Losses Impacting Net Profits: Despite solid operational growth and core profit expansion, net profit attributable to shareholders declined 2% YoY due to large, non-cash, non-current foreign exchange revaluations of long-term energy contracts. These are accounting losses arising from the strengthening Singapore dollar, not cash losses, and are not expected to impact the underlying business.
• Core Profits as Key Performance Indicator: The company highlights core profits (excluding FX impacts) as the true measure of business performance, suggesting management’s confidence in the underlying strength and cash-generating ability of the business.
• Strategic Expansion: ISDN is expanding into Malaysia and Taiwan, tapping into new advanced manufacturing markets and increasing its relevance as an in-region supplier. Vertical integration continues, with new forays into data centre supply, metal injection moulding, and equipment housings, as well as onshoring of manufacturing partnerships in China (notably with Maxon Motors).
• Strong Pipeline in Clean Energy: The ongoing construction of two additional hydropower plants is likely to materially increase recurring revenues and contribute significantly to profits from 2026 onwards.

Management Commentary

Mr Teo Cher Koon, Managing Director and President:

“The Group continued to deliver solid growth in 9M2025, with core profits up 57.5% YoY. Unfortunately, non-cash contract accounting revaluations continued to offset reported earnings as the Singapore dollar strengthened, but our revenues, margins, and cash profits have clearly grown across the Group. We are strengthening our capabilities, expanding into Malaysia and Taiwan, and vertically integrating our offerings. Our renewable energy business remains on track, with two additional plants targeted to commence operations in 2026, expected to contribute meaningfully to bottom-line growth and long-term resilience.”

Business Outlook

• Multi-year tailwinds in industrial automation and advanced manufacturing remain strong in Asia.
• ISDN is expanding market access and technology offerings, including cloud and AI solutions.
• Continued investment in vertical integration and domestic manufacturing to enhance market relevance and supply chain resilience.
• Expected material strengthening of recurring income and profitability from renewable energy expansion by 2026.

About ISDN Holdings

ISDN Holdings is a leading provider of industrial automation solutions in Asia, serving over 10,000 customers with 55 offices across key growth markets. With more than 30 years of history, ISDN powers advanced sectors such as semiconductors, Industry 4.0 manufacturing, medical devices, aerospace, and clean energy.

Conclusion: Investment Takeaways

• ISDN has delivered strong operational and core profit growth, underpinned by robust demand for automation and a rapidly expanding renewable energy business.
• Short-term headline profit was impacted by non-cash FX revaluations, but these are not expected to affect ongoing business performance.
• Upcoming hydropower capacity is likely to further strengthen recurring income and profitability.
• Strategic expansion into new markets and vertical integration could enhance long-term competitiveness and market share.

Disclaimer: The above article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult with a qualified financial adviser before making investment decisions. The information is based on the company’s latest publicly released report and management commentary.

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