Riverstone Holdings Limited: FY2025 Financial Analysis and Investor Insights

Riverstone Holdings Limited, a leading manufacturer of examination and cleanroom gloves, has released its unaudited condensed interim financial statements for the fourth quarter and full year ended 31 December 2025. This analysis reviews the company’s performance, financial metrics, dividend trends, and outlook, providing a clear perspective for current and potential investors.

Key Financial Metrics and Performance Overview

* 3Q2025 and some QoQ data inferred from half-year and full-year splits.
** 4Q2025: Special interim 4.00 sen + Proposed final 5.00 sen.
*** 3Q2025: Interim dividend 8.00 sen paid.
All numbers in RM’000 except EPS and dividend per share (in sen).

Historical Performance Trends

• Revenue: For FY2025, revenue decreased by 7.2% to RM995.3 million (FY2024: RM1,072.8 million).
• Gross Profit: Down 23.4% YoY to RM298.7 million due to lower selling prices and sales volume.
• Net Profit: Declined 27.6% YoY to RM207.8 million from RM286.9 million.
• Gross Margin: Fell from 36.4% (FY2024) to 30.0% (FY2025).
• EPS: Down to 14.02 sen (FY2025) from 19.36 sen (FY2024).
• Dividends: Total declared and paid for FY2025 was 20.00 sen per share (special, interim, and final), versus 24.50 sen in FY2024.

Dividend Summary and Trends

Note: Dividends are tax-exempt, one-tier. FY2025 total excludes any additional future special dividend.

Balance Sheet and Cash Flow Highlights

• Net Assets: RM1.48 billion as of 31 December 2025, down from RM1.58 billion a year ago, mainly due to dividend payments and lower retained earnings.
• Cash & Equivalents: RM630.4 million, down from RM715.1 million, reflecting strong dividend outflows and PPE investments.
• Current Ratio: Remains robust with net current assets of RM792.1 million.
• Capital Expenditure: RM45.7 million spent on property, plant, and equipment in FY2025, down from RM117.4 million in FY2024.

Exceptional Items, Related Party Transactions, and Other Notable Events

• Net Foreign Exchange Loss: RM6.6 million for FY2025 (vs. RM1.0 million gain in FY2024), reflecting currency volatility.
• Directors’ and Key Management Pay: Total compensation RM7.6 million in FY2025, down from RM9.7 million in FY2024, due to lower performance incentive payouts.
• Asset Sales: No major divestments; asset disposals were minor and related to routine PPE replacement.
• Share Buybacks: No share buybacks or new mandates disclosed.
• Related Party Transactions: Purchases of repair/maintenance services and plant/equipment from companies related to directors’ families amounted to minor sums (RM609k for PPE in FY2025).
• No Legal or Regulatory Issues: No mentions of litigation, tax disputes, or regulatory sanctions.

Management and Chairman’s Statement

“The business is currently navigating a challenging environment of price competition, currency fluctuations, volatile raw material prices, and increased production costs. US tariffs are in effect but may change, and we continue to monitor their impact while taking steps to mitigate related risks.”
– Wong Teek Son, Executive Chairman and CEO

The tone of the Chairman’s statement is cautiously negative, highlighting external headwinds (competition, cost inflation, tariffs, and FX volatility) and a proactive but defensive posture.

Outlook and Risks

• Industry Competition: Continues to increase, putting pressure on selling prices and margins.
• Cost Pressures: Raw material and labor costs are volatile, squeezing profitability.
• Geopolitical Risks: US tariffs remain a wildcard.
• No Major Asset Revaluations or Exceptional Gains/Losses: No evidence of asset write-ups or significant one-off items.
• Dividend Policy: Remains shareholder-friendly, though payout levels have been trimmed to reflect lower earnings.

Conclusion & Investment Recommendations

Overall, Riverstone’s FY2025 results reflect a business under pressure from sector-wide margin compression and cost inflation, but with a still-strong balance sheet and substantial cash reserves. The company’s profitability, while down from pandemic-peak levels, remains healthy relative to much of the sector, and its dividend policy continues to reward shareholders—albeit at a reduced rate.

• Performance Strengths: High liquidity, low leverage, continued profitability, disciplined cost management, and ongoing investment in production assets.
• Weaknesses: Declining revenue and profit, lower margins, and a less favorable competitive environment.
• Outlook: Neutral-to-weak, with management’s guidance reflecting caution in the face of external risks.

Investor Guidance

• If you currently hold Riverstone shares:
  
  Consider holding your position if you value stability and dividends, but monitor closely for any further margin erosion or deterioration in the competitive landscape. The company’s strong balance sheet provides a margin of safety, but upside appears limited in the near term unless industry conditions improve.
• If you do not currently hold Riverstone shares:
  
  Exercise patience. Wait for clearer signs of industry recovery or improved company guidance before initiating a position. The stock may be better suited for income-focused investors seeking defensive exposure, but capital appreciation prospects are currently muted.

Disclaimer: This analysis is based strictly on the company’s disclosed financial statements and does not constitute investment advice. Investors should conduct their own research and consult a licensed advisor before making any investment decisions.

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