Charisma Energy Services Limited: 2Q & 1H 2025 Financial Results Review

Charisma Energy Services Limited (“the Company”), a Singapore-listed provider of power generation and energy services, has released its unaudited condensed interim financial statements for the second quarter (2Q) and first half (1H) ended 30 June 2025. The results highlight a transformative period for the Group, marked by corporate restructuring, significant debt resolution, and a return to profitability.

Key Financial Metrics

*1Q 2025 figures inferred as not explicitly stated; “n.m.” = not meaningful due to base period negative results.

Performance Highlights and Trends

• Revenue: 2Q 2025 revenue rose 16% YoY to US\$1.89 million, driven by higher energy generation output and a strengthening Sri Lankan Rupee. 1H 2025 revenue was stable at US\$2.95 million (1H 2024: US\$2.97 million).
• Profitability: The Group achieved a dramatic turnaround to profitability, recording a net profit of US\$42.1 million for 2Q 2025 (versus a net loss of US\$0.4 million in 2Q 2024), and US\$41.4 million for 1H 2025 (versus a net loss of US\$1.1 million in 1H 2024). This was primarily due to a one-off gain on debt forgiveness of US\$42.1 million after completion of the corporate restructuring.
• Gross Profit: Gross profit surged 49% YoY in 2Q 2025 to US\$1.45 million, as cost of sales decreased 34% due to the absence of one-off maintenance expenses present in the previous year.
• Expenses: Administrative and marketing expenses fell 24% YoY in 2Q 2025, reflecting lower accruals for professional fees as the restructuring process neared completion.
• Finance Costs: Sharply reduced by 62% YoY in 2Q 2025 following discharge of obligations post-restructuring.
• EPS: Basic earnings per share rebounded to 59.60 US cents in 2Q 2025 from a loss of 0.17 US cents in 2Q 2024, reflecting the turnaround and capital restructuring.
• Dividend: No dividends declared for the period, consistent with the prior year, as the Group prioritizes cash for future investments.
• Net Asset Value: Turned positive to 4.58 US cents per share, from a negative position in 2024, reflecting the improved balance sheet post-restructuring.

Exceptional & One-Off Items

• Debt Forgiveness Gain: A US\$42.1 million one-off gain was recognized, representing the discharge of significant liabilities under a court-sanctioned restructuring, which drove the leap in net profit and reversal of negative equity.
• Share Consolidation and Capital Restructuring: The Company consolidated every 1,000 shares into 1 share and issued new shares to effect the restructuring, fundamentally altering the share capital structure and reducing dilution risk.
• Divestment: The Company completed the divestment of CES Yichang Pte Ltd in June 2025 as part of the restructuring, resulting in the derecognition of related receivables and restricted cash.

Balance Sheet and Cash Flow Review

• Balance Sheet: Net equity swung from a US\$50.9 million deficit at 31 Dec 2024 to a positive US\$12.5 million as at 30 June 2025, primarily due to the debt restructuring and one-off gain.
• Cash Position: Cash and cash equivalents rose to US\$10.7 million (from US\$230k at 2024 year-end) as previously restricted funds became available post-restructuring.
• Liabilities: Total liabilities plummeted from US\$72.3 million to US\$6.4 million following the full satisfaction and discharge of restructured debts.
• Cash Flow: Operating cash flow was negative in 2Q 2025 (US\$0.5 million outflow), mainly due to lower receivable collections and absence of other income; financing cash flow was strongly positive due to release of restricted cash and new equity injection.

Corporate Actions and Restructuring

• Scheme of Arrangement: The Group successfully implemented a court-sanctioned restructuring scheme, with new equity raised and debts settled via a mix of cash and new share issuance.
• Convertible Loan: A S\$8.2 million (US\$6.4 million) 5-year convertible loan was issued to a major shareholder, providing additional financial flexibility.
• Share Options: Adjusted following the share consolidation, with outstanding options now representing 70.83% of issued shares.

Related-Party Transactions and Remuneration

• Related-party transactions during the quarter were minimal and below the S\$100,000 threshold, including minor rental and interest expenses with entities related to the controlling shareholder.
• No details on directors’ remuneration were disclosed in the report.

Business Outlook and Risks

• The Sri Lanka mini-hydro operations, which form the core business post-divestment, are currently stable and generating positive cash flow. However, performance remains sensitive to rainfall, weather variability, and unexpected plant maintenance.
• The successful restructuring has stabilized the balance sheet and provided a platform for pursuing new opportunities in renewable energy. The Company is now actively looking for expansion and investments in the sector.
• No dividend was declared as cash is being reserved for future investment and acquisition opportunities.

Conclusion and Investment Recommendation

Overall Assessment: The financial turnaround at Charisma Energy Services Limited is remarkable, driven almost entirely by corporate restructuring and a one-off gain from debt forgiveness. The core business remains small but profitable, and the balance sheet is now healthy after years of stress.

• If you are currently holding the stock: Consider maintaining your position in the near term. The restructuring has eliminated major financial risks, and the Company is poised for stability and potential growth. However, monitor for progress on operational cash flow and new business opportunities, as future earnings will need to come from core operations rather than one-offs.
• If you are not currently holding the stock: Exercise patience. While the risk profile has improved, the sharp profit jump is a one-off event. Wait for evidence of sustained revenue and profit growth from the core business or successful execution of new investments before considering entry.

Disclaimer: This analysis is based solely on the published interim financial statements for 2Q and 1H 2025. It does not constitute investment advice. Please consult a licensed financial adviser and consider your own risk tolerance before making any investment decisions.

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