KUALA LUMPUR (May 19): Fiamma Holdings Bhd (KL:FIAMMA) posted a sharp 70.3% decline in first-quarter net profit, mainly due to the absence of a large one-off gain recorded in the same period last year, even as revenue grew.

In a bourse filing, Fiamma’s net profit for the quarter ended March 31, 2026 (1QFY2026) fell to RM10.75 million from RM36.19 million a year earlier. Revenue rose by 5.93% to RM104.36 million from RM98.51 million.

The group’s sharp drop in net profit was largely due to the absence of a RM23.22 million one-off gain recorded in the previous corresponding quarter from equity dilution of Aricia Sdn Bhd and Dawn Land Sdn Bhd, it said in a statement.

Revenue was mainly supported by the trading and services segment, which accounted for 83.4% of total revenue, as higher distribution activity in home appliances, sanitaryware and healthcare devices contributed to earnings growth.

Earnings from its property development segment declined year-on-year, but it said ongoing projects in Johor Bahru and Kuala Lumpur will still contribute to earnings. The group also highlighted progressive billings from its Amberwood project.

The group did not declare any dividend for the quarter.

“We are driving double-digit revenue growth in trading and services, expanding our market reach, and deliberately deploying our balance sheet to secure inventory ahead of anticipated consumer demand,” said group chief executive officer Jimmy Tan Chee Wee.

As at end-March, Fiamma said it maintained a net cash position of RM48.9 million, with cash and cash equivalents of RM139.55 million against total borrowings of RM90.66 million. Inventories rose to RM322.8 million, mainly due to capitalised development costs for ongoing property projects, including Divine KLCC.

The group said consumer demand is expected to remain cautious amid cost of living pressures, but it sees stable demand for mid-range and value-for-money products.

It added that growth will be driven by its trading and services segment, expansion into energy-efficient appliances and healthcare devices, as well as steady contributions from property development projects.

Margin pressure is also expected to persist due to currency fluctuations, logistics costs and supplier pricing dynamics, but Fiamma said it remains cautiously optimistic for the rest of this year.

Fiamma said it also has a proposed joint venture involving Sinaran Urusjuta Sdn Bhd, marking the third property-related entity being converted from a wholly owned subsidiary into a 30%-owned associate.

This forms part of its strategy to move toward a capital-light property model, said Fiamma, where it would allow the group to reduce the amount of money and risk in developing projects while still keeping a stake in them.

Shares of Fiamma were flat at RM1.09 at the time of writing on Tuesday, giving the group a market capitalisation of RM578.1 million.