#Hong Kong #revenue growth #fiscal results #Highway Holdings

Highway Holdings Reports Fiscal Year 2025 Results

Highway Holdings Limited, traded on Nasdaq under the ticker HIHO, recently released its financial results for the fiscal fourth quarter and the entire year ended March 31, 2025. The report indicates the company faced significant challenges but managed to achieve growth in revenue and profitability compared to the previous year.

Financial Overview

For FY 2025, Highway Holdings reported net sales of $7.4 million, reflecting a substantial 17.5% increase from $6.3 million in FY 2024. The company’s gross profit showed even more impressive growth, rising by 47% to $2.5 million, leading to a gross margin of 33% compared to 27% in the previous fiscal year. This marked a return to full-year profitability, with a net income of $106,000, a stark contrast to a net loss of $959,000 reported in FY 2024.

In the fourth quarter of FY 2025, net sales reached $1.5 million, a slight increase from $1.4 million in the same period of the previous year. However, the challenges stemming from the lingering effects of the COVID-19 pandemic continued to impact sales negatively. The fourth quarter's gross profit was $305,000, significantly up from $26,000 reported last year. Despite this progress, the company ended the quarter with a net loss of $315,000, an improvement from a loss of $1.2 million in the prior year's quarter.

External Challenges

Roland Kohl, the Chairman and CEO, acknowledged that while the company made significant strides, it continues to feel the weight of external pressures, including the ongoing geopolitical tensions from the Ukraine-Russia conflict and the U.S.-China trade war. These circumstances have adversely affected many of Highway Holdings’ traditional OEM customers, who are still reeling from the impacts of the pandemic and economic instability.

Kohl emphasized the importance of pursuing new growth opportunities. The company has shifted its focus towards strategic acquisitions and organic growth initiatives. Notably, the acquisition process with Synova was paused due to adverse market conditions, leading the company to explore other potential partnerships.

Financial Position

As of March 31, 2025, Highway Holdings maintained a robust financial position with total equity amounting to $6.3 million, equating to approximately $1.42 per diluted share. The company’s cash reserves stood at about $6 million, or $1.36 per diluted share, ensuring liquidity to navigate current market challenges. Current assets totaled $8.6 million, and the working capital was $5.5 million, reflecting a solid current ratio of 2.81.

Currency Exchange Impact

The company reported a currency exchange gain of $124,000 for FY 2025. This was slightly lower than the $198,000 gain in FY 2024, mainly due to a weakened Kyat. As Highway Holdings does not engage in hedging against currency fluctuations, it anticipates that changes in exchange rates will continue to influence its financial outcomes going forward.

Looking Ahead

Kohl remains optimistic about the future, suggesting that this challenging period could present unique opportunities. By involving younger managers in decision-making processes and strengthening its board, he believes that FY 2025 could mark the company's rejuvenation and pave the way for sustainable growth.

Highway Holdings, based in Hong Kong, produces a variety of high-quality components for equipment manufacturers, primarily in Germany. Its manufacturing operations are situated in Myanmar and China. Despite the numerous challenges it faces, the company aims to adapt and find new paths for expansion as it looks to the future.