QAF Limited FY2025 Financial Results: In-Depth Analysis

QAF Limited, a leading player in the manufacture and distribution of bread, bakery, and confectionery products, as well as food logistics and trading, has released its unaudited full year financial statements for the year ended 31 December 2025. The following article analyzes key financial metrics, performance trends, notable corporate actions, and provides actionable insights for investors.

Key Financial Metrics: FY2025 vs FY2024

Historical Performance Trends

• Revenue: Stable over the year, with a slight YoY decrease (-0.4%) but a marginal QoQ increase for the second half (+0.2%).
• Profitability: Profit after tax climbed sharply by 62% in 2H 2025 compared to 2H 2024, and by 16% YoY. This is mainly due to a foreign currency translation gain vs. a loss last year, and a significant non-cash impairment reversal related to the joint venture investment.
• Margins: Group EBITDA margin improved to 16% for 2H 2025 (from 10% in 2H 2024), and to 11% for FY 2025 (from 9% in FY 2024). PAT margin also improved to 11.0% in 2H 2025 from 6.8% a year ago.
• Dividend: Total annual dividend per share remained stable at 5 cents, comprising a 1 cent interim and a proposed 4 cent final dividend.

Exceptional Earnings and Expenses

• Impairment Reversal: A net non-cash reversal of impairment of S\$8.7 million on the Group’s joint venture investment was recognized in FY2025, compared to a S\$1.2 million impairment previously.
• Exceptional Items (FY2024): S\$6.4 million in insurance payments and write-backs related to severe flooding in Malaysia. No exceptional items in FY2025.
• Foreign Exchange: The Group recorded a foreign currency translation gain of S\$3.7 million in 2H 2025 and S\$0.7 million for FY2025, compared to a S\$8.8 million loss in the previous year, contributing to the sharp rise in profits.

Notable Corporate and Segment Developments

• Bakery Segment: Revenue was flat, but earnings before interest, tax, depreciation, and amortization (EBITDA) fell due to higher staff, lease, and distribution costs. EBITDA margin dipped from 13% to 11% YoY. However, the joint venture in Malaysia (GBKL) saw improved performance, with its revenue up 6% and operating profits rising despite market challenges.
• Distribution & Warehousing: Revenue declined by 2% and EBITDA fell by 14% YoY, mainly due to lower sales and higher logistics and storage costs.
• Borrowings: Total short- and long-term borrowings dropped by 59% from S\$11.6 million to S\$4.8 million, reflecting strong deleveraging and a robust net cash position of S\$190.9 million at year-end.
• Asset Sales: The group sold plant and equipment previously classified as held for sale in FY2024, with related losses/impairments reflected in the accounts.
• Related Party Transactions: Transactions with entities related to controlling shareholders totaled S\$24.9 million, mainly purchases of raw materials and finished products.

Macroeconomic and Industry Outlook

The company notes that while geopolitical tensions eased in 2H 2025, consumer demand remains subdued due to continued high costs and uncertainty. Raw material costs have stabilized, but operating cost pressures (notably labor and logistics) are expected to persist. Foreign exchange volatility is another risk factor, particularly given the Group’s overseas operations and cash holdings.

Chairman’s Statement & Tone

The Chairman’s tone is cautiously optimistic, emphasizing the Group’s commitment to strengthening its competitive position, leveraging proprietary brands, and seeking growth opportunities. The Group aims to mitigate margin pressures through product mix adjustments and operational efficiencies. The balance sheet is described as strong and well-positioned to support future opportunities.

The overall tone is positive, focusing on operational resilience and readiness to capitalize on new growth, while acknowledging ongoing uncertainties and cost pressures.

Dividends

Conclusion and Investor Recommendations

Overall Assessment: QAF Limited delivered a strong recovery in profit in FY2025, mostly due to a foreign exchange gain and a significant impairment reversal on its joint venture investment. The business demonstrated operational resilience, maintained a healthy balance sheet, and kept dividends stable despite persistent operating cost pressures and flat topline growth.

If you currently hold QAF shares:
Given the Group’s improved profitability, strong net cash position, and stable dividend payout, investors may consider holding their position. The company’s robust balance sheet and focus on operational improvements provide some cushion against ongoing macroeconomic uncertainties. However, monitor for changes in forex trends and input cost inflation, as these remain key risks.

If you are not currently holding QAF shares:
Potential investors may consider initiating a position if seeking stable dividend income and exposure to resilient consumer staples. However, given the flat revenue growth and reliance on non-recurring gains for profit uplift in FY2025, entry should be at a price that reflects these risks. Awaiting further evidence of sustainable earnings growth may be prudent.

Disclaimer: This analysis is based solely on QAF Limited’s FY2025 unaudited financial results as reported. It does not constitute investment advice. Please consult your financial advisor before making investment decisions.

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