Latest / Investor Exchange / TEHO International: FY2025 Financial Results and Performance

Transcript

TEHO International: FY2025 Financial Results and Performance · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:08
  Welcome to the deep dive. Okay, let's unpack this.
• 0:11
  Today we're diving into Tiho International Inc. LTD, specifically their FY 2025 results.
• 0:17
  Now, these guys aren't just a one-trick pony. They're into rigging and mooring,
• 0:21
  offshore oil and gas, water treatment, even real estate services. Quite diverse.
• 0:26
  And well, they've had an interesting year. Some really surprising numbers came out. Exactly.
• 0:30
  And our mission today really is to get behind those numbers.
• 0:34
  We want to understand the why, what drove Tiho International's performance,
• 0:38
  what moves do they make, and crucially, what's their outlook?
• 0:41
  The goal is for you to get a quick, clear picture of their financial health.
• 0:45
  Right. And here's where it gets really interesting, as you said,
• 0:47
  the bottom line figure. Profit for the year just soared.
• 0:49
  I mean, up 62.3% to S, $1.46 million.
• 0:53
  That's up from still 0.90 million dollars last year. A huge jump.
• 0:57
  Huge. And that flows down, right?
• 0:58
  Basic earnings per share, your slice of the profit for each share also jumped 63.2% to 0.62 cents.
• 1:06
  But here's the kicker. Total revenue only increased by, well,
• 1:10
  a solid but not spectacular, 6.7%. So $64.5 million total.
• 1:16
  How do you get such a dramatic profit leap from a more modest revenue bump?
• 1:21
  Yeah, Yeah, that's the core question, isn't it? And what's fascinating here
• 1:23
  is where that growth came from.
• 1:25
  It wasn't just about selling massively more stuff overall.
• 1:27
  The main engine was their marine and offshore segment. That segment saw revenue
• 1:31
  climb 6.9%. And the key driver, increased mooring and rigging business,
• 1:35
  specifically linked to orders from newly built vessels.
• 1:37
  Ah, so new shipbuilding activity is giving them a lift. Precisely.
• 1:40
  It suggests that part of the market is picking up and T-Cho's was right there to benefit.
• 1:43
  We also saw a smaller increase of a 3.4% from their other segment.
• 1:47
  That's mainly their water and environmental treatment business.
• 1:50
  So steady performance there, too, contributing a bit.
• 1:52
  Okay, so the core marine business is strong. But that profit jump still feels
• 1:57
  like there's more to it than just the revenue side.
• 1:59
  I mean, things are never that easy, right, even with good numbers.
• 2:02
  Were there, like, headwinds they faced or areas where they really tightened the ship?
• 2:08
  Absolutely. It's definitely a story of strategic management alongside that core
• 2:11
  strength. They showed some real financial discipline.
• 2:14
  For instance, their finance costs, you know, what they pay on loans actually
• 2:18
  decreased by 11.3%. Oh, interesting. Why was that?
• 2:21
  Mainly due to lower interest rates they managed to secure.
• 2:24
  So good timing or smart negotiation there. And distribution expenses were down
• 2:28
  too by 3.6%. That seems linked to the global supply chain issues easing up a bit.
• 2:33
  Okay, so some tailwinds on the cost side. Yes, and their operating cash flow looked much healthier.
• 2:38
  It improved significantly, up by US$1.0 million to reach $5.0 million.
• 2:44
  That points towards tighter credit control with customers and maybe negotiating
• 2:48
  to better payment terms with their own suppliers.
• 2:51
  Strong working capital management base. Makes sense. But it wasn't all smooth
• 2:55
  sailing on the cost front.
• 2:56
  Their overall gross profit margin actually dipped slightly, fell to 36.1% from 37.3% the year before.
• 3:04
  Hmm, why the dip if revenue was up in key areas? It seems mostly felt in that
• 3:09
  same marine and offshore segment, the likely culprit.
• 3:13
  Competitive market conditions. It suggests they might be having to price more
• 3:17
  aggressively to win those new vessel orders, perhaps sacrificing a bit of margin
• 3:21
  to maintain market share. A strategic trade-off, maybe. Could be.
• 3:24
  Plus, administrative expenses rose by 2.9%. That was mainly driven by higher
• 3:29
  manpower costs and salary adjustments, which really highlights that ongoing
• 3:34
  challenge attracting and retaining talent in this market.
• 3:36
  It costs money. Right. The talent war is real. So that's the interstatement
• 3:40
  picture, strong profit, core business driving revenue, but also careful cost
• 3:44
  management and some competitive pressure.
• 3:46
  What about the longer view? What does their balance sheet tell us? Are they investing?
• 3:50
  Are they building for the future? Definitely investing. You can see it clearly
• 3:54
  in their non-current assets, things like property, plant, equipment.
• 3:58
  Those increased by S2.5 million dollars overall.
• 4:01
  And a big piece of that, 4.7 million dollars, was spent specifically on acquiring
• 4:06
  new property, plant, and equipment.
• 4:08
  Okay, where did that money go? Well, it looks like a significant part was financed.
• 4:12
  Their non-current liabilities, long-term debt, increased by S1.0 million dollars.
• 4:17
  And that was specifically linked to loan financing for a new warehousing facility
• 4:21
  they're setting up in South Korea. South Korea. Interesting.
• 4:24
  Expanding their operational footprint then. Exactly. It's not just maintenance spending.
• 4:28
  This signals a clear investment in future capacity, planting a flag for growth,
• 4:32
  even while they talk about caution.
• 4:34
  And alongside that, their total equity, the company's net worth,
• 4:37
  also increased by a healthy S1.3 million dollars.
• 4:41
  So despite the strong finish to FY 2025 and these growth investments,
• 4:45
  what's the official word for management?
• 4:47
  How are they feeling about the next, say, 12 months, especially with the global
• 4:51
  economy still being, well, unpredictable?
• 4:54
  Yeah, it's quite telling. Despite those really strong profit numbers.
• 4:58
  Management is putting out a decidedly cautious outlook for the year ahead.
• 5:03
  They're explicitly flagging ongoing challenges, things like rising costs,
• 5:07
  inflation that just won't quit, and, you know, the general uncertainties in
• 5:12
  global trade and supply chains.
• 5:13
  So no victory lap just yet. Not really, no.
• 5:17
  Their stated focus the next 12 months is very much about prudence.
• 5:21
  They're talking about rigorous cost control, focusing hard on operational efficiencies,
• 5:25
  essentially making sure the business is sustainable through what they clearly
• 5:29
  see as potentially choppy waters ahead.
• 5:31
  It's a pragmatic stance. Okay, so summing it all up, Taleo International had
• 5:35
  a strong FY 2025, impressive profit growth, driven mainly by that core marine
• 5:40
  business picking up steam.
• 5:41
  They managed finances smartly, cutting some costs, improving cash flow,
• 5:45
  but also faced margin pressure and rising admin costs.
• 5:48
  And they're investing for the future, particularly with that new facility in South Korea. Right.
• 5:52
  Which really brings us to the key question for you, the listener,
• 5:55
  to think about how will Tiho International manage that balancing act?
• 5:59
  They've made these significant strategic investments, clearly betting on future growth.
• 6:03
  But at the same time, their official outlook is cautious, focused on cost control
• 6:08
  amidst all this global economic uncertainty.
• 6:11
  Navigating that investing while staying prudent, that's the tightrope walk many
• 6:14
  companies are on right now. Their ability to execute that balance successfully,
• 6:18
  that'll be the story to watch.
• 6:21
  Thank you.