EuroSports Global Limited (Catalist: 201230284Z) – 3Q & 9M FY2026 Financial Review

EuroSports Global Limited (“ESG”) released its unaudited condensed interim financial statements for the third quarter and nine months ended 31 December 2025. The report provides insights into the Group’s performance, financial position, and outlook as it continues to operate in the luxury automobile distribution and sustainable mobility sectors.

Key Financial Metrics and Results

Historical Performance Trends

• Revenue: Revenue for the nine months ended 31-Dec-25 fell 22.6% YoY to S\$34.08m, primarily due to softer demand and elevated automotive taxation in Singapore. The automobiles distribution segment remains the main contributor.
• Gross Profit Margin: Despite lower revenue, gross profit margin improved to 15.1% (from 12.0%) due to a higher proportion of sales with better margins.
• Net Loss: The net loss narrowed significantly YoY, from S\$6.75m to S\$1.68m for the nine months, reflecting improved cost management and reduced impairments.
• Administrative Expenses: Down 36.3% YoY, driven by lower staff costs and tight control of consultancy, travel, and other overheads.
• Finance Costs: Up 54.1% YoY, due to higher short-term loan activity and investment in sustainable mobility.

Cash Flow & Financial Position

• Net Cash Used in Operating Activities: S\$0.68m outflow for 9MFY2026, with working capital outflow exceeding operating cash inflow. Operating cash flow before working capital changes was positive.
• Net Cash From Financing Activities: S\$1.90m inflow, mainly from loans and sales of treasury shares.
• Net Asset Value (NAV): Per share dropped to (0.06) cents from 0.18 cents as at 31-Mar-25.
• Current Ratio: Both Group and Company have current liabilities exceeding current assets, indicating a tight liquidity situation.

Exceptional Items & Corporate Actions

• Share Buyback and Treasury Shares: The Company repurchased 611,000 shares and sold 20,000,000 treasury shares during the period, raising S\$1.20m.
• Convertible Bonds: Outstanding S\$3.3m convertible bonds, with options for conversion based on trigger events or maturity. No dilution yet as conversion is anti-dilutive at current prices.
• No Dividend Declared: The Group is conserving cash for business operations.

Chairman’s Statement & Outlook

“Ultra-luxury Automobile Distribution and Aftersales
The luxury automotive sector continues to operate in a challenging environment, shaped by ongoing global economic uncertainty and elevated automotive taxation in the local market. Trade tensions and tariffs imposed by the United States have continued to weigh on consumer confidence, contributing to a more cautious demand environment. These factors, together with the sustained impact of the 2023 tax adjustments on luxury vehicles, have moderated sales momentum across the ultra-luxury segment.
Against this backdrop, the Group has demonstrated resilience and remains well positioned within its competitive landscape. A healthy order book continues to support performance, underpinned by robust demand for the newly introduced Urus SE, the plug-in hybrid Super SUV that commenced deliveries in Q1 FY2026. Customer response has been highly encouraging, and the model is expected to remain a key contributor to the Group’s performance in the coming quarters.
The Group’s product offering was further enhanced with the local launch of the Lamborghini Temerario in August 2025. This new-generation super sports car, featuring a hybrid twin-turbo V8 engine, reflects Lamborghini’s continued focus on innovation and performance. Early customer interest has been positive, with pre-orders received ahead of the arrival of demonstrator and showroom units, which are expected in Q4 FY2026.
Sustainable Mobility – Singapore’s First Electric Motorcycle Manufacturer
Our subsidiary, SEC, has achieved considerable progress in research and development, and is preparing for mass production. There were multiple milestone achievements in 2025. Firstly, In July 2025, as part of a product rebranding exercise, we released a new name for our first electric motorcycle, now called “Lambda Scorpii”.
During the same period, the Lambda Scorpii achieved European Whole Vehicle Type Approval, the first clean sheet designed electric motorcycle from Singapore to receive European Whole Vehicle Type Approval certification, meeting all the required European Union safety, environmental, and technical standards under Regulation (EU) No. 168/2013.
SEC also participated in the SG60 National Day Parade 2025. Inspired by the Singapore national flag, our freshly designed Lambda Scorpii led the mobile column to kickstart the show segment of the parade, a momentous occasion to mark history.
While we work towards mass production, SEC is in the midst of establishing new distribution and aftersales channels in the Asia Pacific and European regions. We plan to grow our distributor and dealer network in over 10 to 15 cities across the Asia Pacific and European regions. We are also in discussions with strategic investors, who will unlock operational value to SEC. The Group anticipates top line growth when we commence mass production and deliveries in 2027.
Outlook
Looking ahead, while macroeconomic and regulatory uncertainties are expected to persist, the Group remains confident in its strategic direction and operational agility. Supported by a diversified and increasingly electrified product portfolio, sustained brand desirability, and disciplined cost and capital management, the Group believes it is well placed to navigate market conditions. Over the next 12 months, the Group will remain focused on balancing prudent execution with selective growth opportunities to deliver sustainable, long-term value for shareholders.”

Events and Risk Factors

• Challenging macroeconomic environment and high automotive taxes in Singapore and globally.
• Liquidity remains tight; current liabilities exceed current assets; management expects to refinance or extend obligations.
• Material uncertainty regarding going concern, though management and directors believe operations and cash flows will be sufficient.
• Milestones achieved in sustainable mobility segment, but mass production and revenue are only expected in 2027.

Conclusion and Recommendations

Overall Assessment:
The financial performance appears neutral to weak. Revenue and net asset value have declined, but losses have narrowed and gross margins improved. Cash generation and liquidity remain challenging, with the Group reliant on refinancing and fundraising. The outlook is cautiously optimistic, supported by a healthy order book and progress in the electric motorcycle venture, though tangible top-line growth from sustainable mobility will materialize only from 2027.

Recommendation for Current Shareholders:
If you are holding EuroSports Global shares, consider maintaining your position if you have a higher risk tolerance, given the company’s strategic initiatives, improving loss trends, and new product launches. However, keep monitoring liquidity risk, refinancing progress, and execution of mass production in sustainable mobility. If your risk tolerance is lower or you require short-term positive cash flow and dividend returns, consider reducing exposure.

Recommendation for Prospective Investors:
If you do not currently hold this stock, it is advisable to remain on the sidelines until new revenue streams from sustainable mobility begin, and liquidity risks are addressed. The company offers potential upside from the electric motorcycle launch and luxury automobile demand, but these benefits are likely to be realized only from FY2027 onwards. Consider entry only if further evidence of operational turnaround, cash flow improvement, and successful refinancing is demonstrated.

Disclaimer: This article is based on publicly available financial reports and does not constitute investment advice. Please consult your financial advisor before making investment decisions. All opinions are strictly based on the company’s disclosures and actual financial performance.

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