LY Corporation Limited 1H2025 Results: Revenue Down 6.9%, No Dividend Declared Amid Net Loss of RM15.4 Million

LY Corporation Limited: 1H2025 Financial Performance Review

LY Corporation Limited, a Singapore-listed manufacturer and retailer of furniture and millwork products, released its unaudited financial statements for the six months ended 30 June 2025. This analysis provides a concise summary of key metrics, performance trends, and significant events influencing the Company’s outlook.

Key Financial Metrics

Metric	1H2025	2H2024	1H2024	YoY Change	QoQ Change
Revenue (RM’000)	102,195	109,744	109,744	-6.9%	-6.9%
Gross Profit (RM’000)	(1,839)	11,041	11,041	-116.7%	-116.7%
Net Profit/(Loss) (RM’000)	(15,437)	5,293	5,293	-391.6%	-391.6%
EPS (sen)	(2.99)	1.03	1.03	-390.3%	-390.3%
Net Asset Value per Share (RM)	0.39	0.42	0.42	-7.1%	-7.1%
Dividends	None	None	None	No Change	No Change

Historical Performance Trends

The Group shifted from a net profit of RM5.3 million in 1H2024 to a net loss of RM15.4 million in 1H2025.
Gross profit margin deteriorated from +10.1% in 1H2024 to a gross loss margin of -1.8% in 1H2025.
Revenue declined by 6.9% YoY, mainly due to lower average selling prices and unfavorable USD/MYR exchange rates.

Exceptional Earnings and Expenses

1H2024 revenue was boosted by a non-recurring variation claim related to COVID-19 shipment delays.
1H2025 saw a reversal of RM1.5 million in allowance for slow moving inventories, partially offsetting cost increases.
Foreign exchange swung from a net gain of RM2.2 million in 1H2024 to a net loss of RM0.8 million in 1H2025.
Selling and administrative expenses rose 35.9% due to costs from newly acquired subsidiaries.

Dividends

No dividends were declared or recommended for 1H2025 or 1H2024. The Board cited cash conservation and reinvestment needs for this decision.

Legal Disputes and Contingent Liabilities

Outstanding claims: Subsidiary LEH received a demand from Synergy House Furniture for RM823,395.61 related to royalty payments.
LY Furniture Sdn Bhd is involved in litigation with Xin Hwa Trading & Transport over missing inventory (USD78,889.53 claimed by LYFSB; RM311,501.12 counterclaimed by Xin Hwa). No provisions have been made for these claims.

Macroeconomic and Policy Risks

Imposition of a 19% US tariff on Malaysian imports effective 1 August 2025 could pressure demand, costs, and pricing.
Malaysia’s new sales and services tax, higher electricity tariffs, and mandatory EPF contributions for foreign workers will raise operating costs.
Exchange rate volatility (USD/MYR) remains a significant risk, especially given the Group’s USD-denominated sales exposure.

Related Party Transactions

Related Party	Aggregate Value (RM’000)	Nature
Lean Shern Furniture Sdn Bhd	20,860	Sales of goods/services
Leatherworld Upholstery Sdn Bhd	1,074	Sales of goods/services

Corporate Actions and Asset Sales

On 17 January 2025, the Company announced the proposed disposal of a 21% stake in Leyo Holdings Sdn Bhd (LEH) for RM1.00. Completion is pending certain conditions.
No share buybacks, placements, or new convertibles during the period.

Chairman’s Statement and Tone

The Chairman’s statement is not explicitly quoted in the report, but management commentary reflects a cautious and defensive tone. The Board emphasizes cost control, cash conservation, and careful monitoring of external risks.

Forecasted Events & Outlook

US tariffs and domestic cost pressures are expected to dampen demand and margins, especially in the core Furniture segment.
Currency volatility and regulatory changes add uncertainty to the Group’s short-term outlook.
No formal forecast or prospect statement was provided.

Conclusion & Investment Recommendations

Overall assessment: The Group’s financial performance for 1H2025 is weak, with a sharp reversal from profit to loss, declining margins, and substantial external risks. Cost increases, currency headwinds, and new tariffs threaten near-term recovery.

Recommendation for Current Shareholders:

Consider reducing exposure or holding only if you have a long-term risk appetite and expect a recovery post-tariffs or after cost pressures subside.
Monitor legal disputes, regulatory changes, and future quarterly results closely.

Recommendation for Potential Investors (not holding):

Exercise caution and avoid initiating new positions until there are clear signs of earnings recovery, resolution of legal disputes, or improved external conditions.
Reassess after subsequent results and regulatory developments.

Disclaimer: This analysis is based exclusively on the financial report provided. It does not constitute investment advice. Investors should consider their own risk profile and seek professional advice before making investment decisions.