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How Goodland Group Flipped Loss To Profit In FY2025 · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:08
  Welcome to the Deep Dive. Today, we're looking at a really fascinating financial
• 0:11
  turnaround, one of the most interesting we've seen this quarter, actually. We are.
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  We're talking about Goodland Group Limited, or GGL, and we're going to be dissecting
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  their latest numbers for the full year that ended September 30, 2025.
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  And we'll be comparing that against the previous year, FY 2024. Right.
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  And it's just this perfect example of why you can't judge a company,
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  especially in property development, just by the headline numbers.
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  Not at all. Because what we have here is a set of results where the revenue
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  looks, well, pretty weak. It dropped substantially.
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  And yet somehow the company managed to pull off a dramatic recovery on the bottom line.
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  It's quite the story. That is exactly our mission today, to figure out the mechanics of that paradox.
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  How on earth do you sell less but make significantly more profit?
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  Let's start with the big one. The number that really tells the whole story in a nutshell. Go for it.
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  GGL swung from a loss before tax of S2.262 million dollars back in FY 2024.
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  Right, a loss of over 2 million. To a profit before tax of S1.640 million dollars in FY 2025.
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  That's just a massive swing. You are looking at a nearly 4 million dollar improvement
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  in their financial health, all while their sales were supposedly struggling.
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  It's a remarkable feat. And, you know, the confusion really starts when you
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  look right at that top line, at the revenue.
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  OK, let's dig in. Their total revenue decreased by C4.6 million dollars.
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  It fell from 10.7 million dollars in 2024 down to just 6.1 million dollars in 2025.
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  That's a drop of over 40 percent. I mean, a 40 percent drop in revenue is usually
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  a huge red flag. A huge red flag.
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  And we know it was mainly due to lower sales from their development properties.
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  But when you really dig in, the slowdown was even more severe than that number
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  suggests. Especially later in the year, right? Oh, absolutely.
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  The second half of FY 2025 was kind of ghost town for sales.
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  Revenue just plummeted to $6.6 million.
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  $600,000. Yep, compared to $5.5 million in the second half of 2024.
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  And here's the kicker, the really critical piece of information for you. Okay.
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  That $6.6 million in revenue was derived solely from rental income.
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  Wait, hold on. You're saying that for the last six months of their financial
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  year, GGL recognized zero dollars in development property sales.
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  Essentially, yes. It suggests either projects just weren't hitting that completion
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  stage for them to recognize the revenue or, you know, maybe it was a strategic
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  choice to hold off, maybe wait for better pricing.
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  So for the whole year, what did that core property development revenue end up
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  being? Just $4.88 million for FY 2025, which is way down from this $9.21 million the year before.
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  So they recognize less than half the development revenue.
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  This just makes the puzzle deeper because despite that, their gross profit actually improved.
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  It did. It went up. It rose from $0.7 million to $1.3 million.
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  I mean, the implication is that the few sales they did recognize must have been
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  incredibly profitable.
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  That is exactly the pivot they made. The profitability of their deals just skyrocketed.
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  Their gross profit margin jumped from a really thin 7% in 2024.
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  Which is not a lot of room for error. Not at all.
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  And it jumped to an exceptional 22% in FY 2025.
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  The source material says this was due to higher margin earned from sale of development
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  properties sold in FY 2025.
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  In practical terms, what does that mean? Are we talking about selling projects
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  where the land was bought cheap years ago or maybe construction costs were just
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  managed incredibly well?
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  It's probably a few things. First, you had disciplined cost control on the projects
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  that have finished this year.
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  But second, it really suggests that the properties they sold were likely higher
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  value, maybe more premium developments that command better pricing.
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  So they traded volume for quality and margin. Exactly. They made sure every
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  single unit they sold counted for a lot more.
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  Okay. So that trade-off lifted gross profit by $3.6 million.
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  That's great. But to get a nearly $4 million swing in profit before tax,
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  they needed a lot more help.
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  A lot more. And that's where we have to look below the gross profit line,
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  because that's where the real story of internal optimization and asset appreciation
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  comes in. So not from development sales?
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  Not primarily, no. It was lifted by two big factors. A major boost from other
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  operating income and just really tight control over their internal spending.
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  Let's start with other operating income. How big was that increase?
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  It was substantial. It went up by S1.9 million dollars, hitting 6.0 million dollars for the year.
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  And almost all of that came from the performance of their existing assets.
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  Their investment portfolio. Correct.
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  Specifically, 5.43 million dollars of that 6.0 million dollars was from higher
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  revaluation gains on their investment properties.
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  That's up from S3.91 million dollars last year. Okay, and that's a critical
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  point for you, the listener, to remember.
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  This 5.43 million dollars is a paper game.
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  It reflects the rising market value of their assets, but it is not cash coming in the door from a sale.
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  Absolutely. And that distinction will be very important when we get to the cash
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  flow statement. So that was one
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  lever. What was the other? Management discipline. Just pure cost cutting.
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  Administrative expenses went down by S1.2 million dollars. Yeah,
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  from over S4 million dollars down to S2.889 million dollars.
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  And it wasn't just one thing. The sources say it came from lower salaries.
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  Welfare, depreciation, repairs, a whole range of things.
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  So they found operational savings worth double their increase in gross profit.
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  That S1.2 million dollars in cuts shows that management was really focused on
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  efficiency while sales were slow. It's a very strong internal story.
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  And they found savings elsewhere, too.
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  Their finance costs, so the interest on their debt, that decreased by about half a million dollars.
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  And that was just due to better interest rates? Primarily, yeah.
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  Lower loan interest rates on current loan balances, is what the report says.
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  Okay, so you've got this powerful combination, appreciating assets,
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  aggressive internal cost control, and cheaper debt.
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  What about their outside investments, their associates?
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  That also improved, though more modestly. The share of results from associates
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  added about $2.15 million to the bottom line, up from almost nothing in 2024.
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  So if you put it all together, the big turnaround was really driven by higher
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  margins on a few sales, massive paper gains, and very aggressive cost control.
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  That's the formula right there.
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  Which is a perfect transition to the balance sheet. Because if they were cutting
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  costs so hard, you have to ask how that impacted their ability to fund future growth.
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  A developer can't just stop building. And you see that investment story written all over their assets?
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  Development properties for sale, which is basically their project inventory,
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  it increased by a huge $18.0 million.
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  $18 million. Yeah. Bringing the total to S, $234.3 million. And the report is clear. here.
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  This is due to costs sunk into new and ongoing projects.
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  They are spending big now for revenue down the road. So they're cutting the
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  admin budget in the office while pouring millions into concrete and steel on site.
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  That's a very clear strategic shift. It's a classic case of becoming operationally
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  lean while showing real confidence in your development pipeline.
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  And what about their other assets? Their investment properties also grew by
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  about $6.4 million, mostly from those fair value gains we talked about.
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  Okay, but I see one number that drops significantly. Their investment in associates
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  fell by F5.3 million dollars.
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  Why such a big drop there? That's actually a good sign for their cash position.
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  It was mainly because they received net dividends from those associates.
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  Ah, so they were catching out. Exactly.
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  They monetized part of their stake or just got big cash payouts,
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  which gives them more internal capital to play with.
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  They also completed the sale of a smaller asset for us 1.2 million dollars.
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  So GGL has sold a small asset and collected a nice $5 million in dividends.
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  That's some good cash generation.
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  But that doesn't cover an S-18 million dollar inventory buildup.
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  Nope. For the rest, they turned to the banks. They leveraged up. They did.
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  Bank borrowings increased by $15.4 million, pushing their total debt to $106.3 million.
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  So they are actively financing that increase in their development pipeline with
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  new debt. And the net result of all that spending and borrowing is that their
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  net working capital decreased.
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  Right. By about S4.6 million dollars.
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  It's a direct reflection of taking on more bank loans and plowing cash into
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  development projects. The balance sheet really tells a story of aggressive funding then.
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  Cashing out mature investments and taking on new debt to build for the future.
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  Which brings us to the elephant in the room.
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  Cash flow. We know the profit relied heavily on those non-cash gains.
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  So let's see what the cash flow statement says, because profit on paper and
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  cash in the bank are two very different things. And this is where it all comes together.
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  Despite posting that S1.64 million dollar profit, in FY 2025.
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  The company saw a net cash used in operating activities of S21.7 million dollars. Wow.
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  It's a massive outflop. $21 million burn through in operations after reporting
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  a profit. That's the question for you, the listener.
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  Where did all that cash go? And the answer is their strategy.
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  It's that choice to invest. The cash use was almost entirely driven by a $22.8
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  million outflow to increase their development properties.
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  So that's the real cash cost of that inventory buildup we saw on the balance sheet. That's it.
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  They're literally spending cash now to build the high margin product they hope
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  will generate huge revenues next year and beyond. So it's not a sign of weakness,
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  it's a sign of commitment.
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  But where did they find the cash to cover a $21 million operational burn?
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  Well, their investing cash flow was a big help. It actually generated $7.7 million.
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  Okay, and that was mainly the dividends. Yep.
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  S5.1 million dollars in dividends from their associates, which was a smart move,
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  plus the S1.2 million dollars from selling that other asset.
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  Right. And then finally, their financing cash flow was also positive.
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  Strongly positive. Yeah. It generated S$10.1 million, and that came mostly from
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  the S$20.5 million in new bank loans they took on. So they are borrowing to bill. Exactly.
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  They offset some of that with loan repayments and dividend payouts to their
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  own shareholders, but the net effect was a big cash injection from financing.
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  And overall, their capital health still looks pretty solid.
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  Total equity is at S$183.52 million.
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  Though I do see the net asset value per share dipped a little bit.
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  It did, from $0.51.95 to $0.51.01.
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  It just reflects all that investment activity and the new debt.
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  The cash flow really does capture their strategy perfectly then.
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  Profitable on paper, thanks to gains and cost-cutting, but a very demanding year for cash.
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  And that demand was met by new debt and cashing out older investments,
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  all to build up their future inventory.
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  So moving forward, what kind of market are they expecting to sell all this new inventory into?
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  Well, they seem to see a market that's robust, but let's say complex.
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  In Singapore, the official URA data shows private property prices still went
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  up by 0.9% in the quarter.
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  And it was stronger for landed properties, right? Right. Landed properties rose
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  1.4%, which is where a lot of those high-margin projects tend to be. That makes sense.
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  And then outside Singapore, in Malaysia, they're expecting moderate growth in
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  2025, supported by domestic demand and stable interest rates.
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  They even point to high-tech industries in Penang, lifting demand for commercial properties there.
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  So it sounds like a market that rewards a very targeted, cautious approach.
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  And that's exactly how they describe their own strategy. They say they remain
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  cautiously optimistic, and they're prioritizing delivering projects on time.
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  Keeping up that cost management discipline that works so well,
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  and be very selective about what they build next.
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  And their dividend decision seems to back that up. It does. They proposed a
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  final dividend of 0,001 FEM per share.
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  That is way down from the 0,001 FEM per share they declared in the same period
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  last year. So they're holding on to their cash.
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  Absolutely. It signals a clear focus on capital retention, making sure they
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  have the money internally to keep funding that big development pipeline without
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  having to borrow even more.
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  Okay, let's kai this all together. What is the single key takeaway for you,
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  the listener, about GGL's performance?
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  I'd say that GGL executed a really profound strategic turnaround.
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  They flipped a loss into a profit, not with huge sales volume.
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  In fact, that volume collapsed.
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  But by squeezing every drop of profit from the sales they did make,
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  cutting costs aggressively, and benefiting from paper gains on their existing properties.
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  And they did all of this while borrowing more and investing S18 million dollars into their future.
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  And here's the final thought for you to chew on. That S4 million dollar profit
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  swing was a huge management victory. But it was rooted in internal moves and asset appreciation.
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  Now that the balance sheet is loaded with new inventory and new debt,
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  the real test is about to begin.
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  Can they convert that expensive high-motion inventory into high-volume cash revenue?
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  Right, because if they can't, they will have spent heavily and taken on debt
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  without the operating cash flow to back it up.
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  You can't rely on massive revaluation gains every single year.
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  A huge challenge for them as they head into FY 2026.
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  The real execution phase starts now. Thank you for joining us for this Deep Live into the Numbers.
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  We encourage you to review the sources yourself and see what stands out to you. Until next time.