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V2Y Corporation 1Q 2025 Financial Results · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:08
  Okay, let's unpack this then. We've got our hands on the first quarter 2025
• 0:12
  financial results for V2Y Corporation LTD straight from their official announcement.
• 0:18
  Yeah, it's quite a stack of documents here. It gives us a snapshot first three
• 0:22
  months of 2025 compared to last year. Right.
• 0:24
  And our mission really is to cut through the numbers, try to figure out the
• 0:28
  story behind them. And, crucially, see what the company says about the road
• 0:31
  ahead, especially after this quarter ended. Some big moves happened.
• 0:35
  Exactly. Why should you care? Well, understanding these reports,
• 0:38
  especially with all these changes, it really gives you a window into a company's
• 0:41
  health and its strategy.
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  So, okay, diving into Q1 2025, the headline number.
• 0:49
  It might look pretty good on the surface. Revenues surged to $606,000.
• 0:53
  Which is, I mean, a massive jump from just $71,000 in Q1 2024.
• 0:58
  That's what, over 750% increase?
• 1:00
  Yeah, huge. But, and this is key, we need to dig into why. The report's clear
• 1:04
  this wasn't, you know, growth in their original business.
• 1:07
  No, it seems this huge increase came mainly from these new food and beverage
• 1:11
  and trading segments, things they only acquired or started running late last
• 1:16
  year, right? Exactly. And that's where it gets a bit tricky.
• 1:19
  Because while revenue soared, the cost of making those sales also jumped dramatically.
• 1:24
  We're talking over 1,450%. Wow.
• 1:27
  Okay. Again, because of these new businesses. Largely, yes.
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  And look what it did to profitability per sale, the gross profit margin.
• 1:35
  It just plummeted. Went from a pretty healthy 49% in Q124. Down to just 7.75% in Q125.
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  That's a huge drop. It really is. So they brought in way more money,
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  but kept significantly less of it as profit after covering the direct cost.
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  And the company points the finger directly at the F&B segment for that squeeze,
• 1:55
  doesn't it? Lower margins there compared to their original insert tech core.
• 1:59
  Precisely. More revenue, sure, but much less profitable revenue overall.
• 2:03
  Okay. What about other costs? Did anything else change much?
• 2:05
  Well, administrative expenses actually decreased slightly. That's a positive.
• 2:08
  Mainly lower payroll costs, it seemed. But finance costs went up quite a bit,
• 2:13
  tied mostly to higher interest on lease liabilities.
• 2:16
  Again, probably linked to running those new F&B outlets or trading spaces.
• 2:20
  Right. Makes sense. So when you put it all together, the total group loss before
• 2:24
  tax, did that improve? It did decrease, yeah, by about 30%. Dropped from S$215,000 down to $149,000.
• 2:33
  So looking at the whole group, slightly better bottom line before tax.
• 2:37
  Okay, an improvement overall then. Well, yes, for the consolidated group.
• 2:40
  But here's a really critical detail the report mentions.
• 2:43
  The loss that's actually attributable to the honors, the shareholders of the
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  parent company, that actually increased.
• 2:49
  Increased, how much? By nearly 20%. Went from S$215,000 up to $257,000.
• 2:55
  Huh. So how does that work? The group loss went down, but the owner's loss went up.
• 3:00
  It's because non-controlling interests, basically partners and some of the subsidiaries,
• 3:05
  absorbed some of the total loss this period, which means a larger slice of the
• 3:09
  remaining loss fell onto the parent company's owners.
• 3:11
  Ah, okay, that distinction's important. So despite the group looking a bit better,
• 3:15
  the core parent company situation actually got, well, worse. You got it.
• 3:19
  And this ties right into the balance sheet picture. as of March 31st, 2025.
• 3:26
  Things look pretty challenging. How so? The group was in a net liabilities position.
• 3:31
  You know, basically means its total debts and obligations were higher than its
• 3:35
  total assets. By how much? By $758,000.
• 3:39
  And that position actually worsened from the end of 2024 when it was $409,000.
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  They also mentioned significant net current liabilities too.
• 3:48
  Meaning short-term assets don't cover short-term debts. Exactly.
• 3:51
  Not a comfortable position to be in. And because of all this,
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  the financial state, there's that serious note in the report,
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  isn't there? Yes, the material uncertainty regarding their ability to continue
• 4:01
  as a going concern, that's auditor speak for there's significant doubt they can keep the lights on.
• 4:06
  Unless things change drastically. Depends heavily on what? Generating cash,
• 4:09
  cutting costs, raising money? All of the above.
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  So yeah, Q1 painted this picture. A company struggling, weighed down by these
• 4:15
  lower margin new businesses, and a deteriorating balance sheet.
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  And it really seems like this tough situation was the trigger for what happened
• 4:23
  immediately after the quarter ended.
• 4:25
  Big strategic moves. Absolutely. It's like the Q1 numbers landed and they acted fast.
• 4:31
  The commentary reveals that since those F&B retail businesses weren't working
• 4:35
  out. They decided to just get rid of them quickly. Yep.
• 4:38
  Announced the disposal of three loss-making F&B subsidiaries on April 4th,
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  literally days after the quarter finished.
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  And they expect a decent gain from that sale. Over S1 million dollars, they reckon.
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  And importantly, it lets them refocus resources back onto their stated core
• 4:55
  business. The original insertech stuff.
• 4:57
  Exactly. And then, hot on the heels of that, April 21st, they completed a share placement.
• 5:02
  Raising more cash. But about $451,000 in fresh cash, yes.
• 5:06
  And they explicitly say this funding, plus the gain from selling the F&D bits,
• 5:11
  is aimed squarely at strengthening their financial position,
• 5:14
  easing those cash flow problems we saw in Q1.
• 5:17
  And they've started using it already for working capital.
• 5:20
  That's what the report says. So the company's outlook now is basically these
• 5:24
  decisive actions, shedding the problem parts, getting cash in.
• 5:28
  This should help stabilize things. That's the plan.
• 5:31
  Strengthen the finances over the next few months. Concentrate on the higher
• 5:35
  margin insert tech operations.
• 5:37
  A strategic pivot, really. OK, so let's bring it back. What does this all mean for you? Listening.
• 5:43
  V2Y's first quarter showed this real strain. Integrating new,
• 5:47
  lower-margin businesses squeezed profits badly, even though revenue jumped.
• 5:51
  Right, and the balance sheet got worse.
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  The loss hitting the actual owners increased.
• 5:56
  Clear signs of trouble. The real story here might be that swift,
• 5:59
  pretty dramatic response after the quarter.
• 6:01
  Selling off the unprofitable F&B, raising cash, actions clearly triggered by
• 6:06
  that difficult Q1 reality.
• 6:08
  Definitely seems that way. So it really raises this important question for you
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  to think about. Given how tough those Q1 numbers looked, the margin pressure,
• 6:14
  the net liabilities, that going concern warning, will these recent strategic
• 6:18
  moves actually be enough?
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  Will selling the problem parts and getting this new funding fundamentally turn
• 6:24
  the company around and fix that challenging financial position?
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  Music.