On 21 February 2025, Riverstone Holdings Limited (“RS”) announced their full year result for FY2024. Noted from the previous quarter, their earnings per share is lower than the dividend paid out in the calendar year 2024. For the last three months before financial year end, there seems to be a slowdown in their financial performance. The total cash flow from operations is also insufficient, and RS saw a decrease in cash balances during the year. While RS had seen a better year in FY2024 as compared to the previous financial year, investors will need to monitor if there are further cuts to the dividend payout over the next few quarters.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Full Yearly Results
Website: General Announcement::Corporate Presentation FY2024
Financial Highlights
Revenue
| Metrics | Current | Previous |
|---|---|---|
| Revenue | +17.3% | +16.0% |
| Rating | Favorable | Favorable |
Revenue for FY2024 has increased by 17.3% to MYR1,072 million from MYR914 million for the previous financial year, primarily driven by increased production volume and higher average selling prices. Overall, the revenue metric is Favorable.
Earnings per share
| Metrics | Current | Previous |
|---|---|---|
| Earnings per share | +30.2% | +41.9% |
| Rating | Favorable | Favorable |
Earnings per share for FY2024 has increased by 30.2% to MYR0.1936 per share as compared to MYR0.1487 per share in the previous financial year. The increase is more than proportionate than the increase in revenue, due to gross profit increasing by 32.0% driven by a better product mix, higher average selling price, and lower cost of sales during the reporting period. This metric remains Favorable and is a good aspect of the dividend stock.
Operating Cash Flows
| Metrics | Current | Previous |
|---|---|---|
| Operating Cash Flows | +23.3% | +44.5% |
| Rating | Favorable | Favorable |
Cash flow generated from operations for FY2024 amounted to MYR306 million, an increase by 23.3% compared to MYR249 million for the previous financial year. The increase continues to be mainly supported by their profit generated during the period, therefore the metrics remain Favorable.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing ratio | 11.4% | 10.2% |
| Rating | Favorable | Favorable |
Gearing ratio stands at 11.4% as of 31 December 2024. This metric is computed using total assets of MYR1,779 million and total liabilities of MYR202 million. The metrics remains Favorable as RS is less reliant on external sources to fund operations.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest coverage | 7,632.6x | 7,409.5x |
| Rating | Favorable | Favorable |
The interest coverage stands at 7,632.6 times as of 31 December 2024, using profit before interest and tax of MYR358 million and finance costs of MYR0.047 million. The significantly high interest coverage is due to the Group has no external borrowings, with finance costs arising due to their lease liabilities. The metric remains Favorable.
Price-to-book ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 3.08 | 3.31 |
| Rating | Unfavorable | Unfavorable |
The Net Asset Value (“NAV”) per share of the Group as of 31 December 2024 stands at MYR1.06 per share. This amounts to SGD0.319 per share when translated at the closing exchange rate of SGD1:MYR3.32 as of 7 March 2025. With a closing share price of SGD0.985 as of 7 March 2025, the Price-to-book (“P/B”) ratio for RS is 3.08. This is Unfavorable as you will be paying a significant premium to its book value.
Website: Yahoo Finance SGD to MYR
Worth noting that with cash and cash equivalents of MYR715 million and no borrowings, at total ordinary shares of 1,484 million this represents net cash of SGD0.14 per share.
As of 7 March 2025, the Market Capitalization is approximately SGD1,460 million.
Website: Yahoo Finance: Riverstone Holdings Limited (AP4.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 1.22% | MYR 0.040 |
| 2024 | 7.50% | MYR 0.245 |
| 2023 | 8.57% | MYR 0.280 |
| 2022 | 16.52% | MYR 0.540 |
| 2021 | 9.18% | MYR 0.300 |
| 2020 | 3.01% | MYR 0.099 |
With the dividend payout in April 2025 amounting to MYR0.040 per share, this is 80% lower than the amount paid in the same period for the previous financial year. This is in line with previous estimations, as RS has been paying dividend of MYR0.040 per share in October 2024 and December 2024. As a conservative estimate, the expected dividend payout for the calendar year 2025 will be marked at 80% of the calendar year 2024, which amounts to MYR0.196 per share.
With a closing share price of SGD0.985 and closing exchange rate of SGD1:MYR3.32 as of 7 March 2025, this translates to a dividend yield of 6.00%. For my benchmark, a general reasonable yield would be around 5.25%. The dividend yield is thus Favorable.
Website: Reasonable Dividend Yield 2025Q1 – 5.25%
If using dividend yield of 6.25% as a benchmark, based on the dividend of MYR0.196 per share there is potential for RS to see its share price drop by another 4.1% to SGD0.945. This may occur should interest rates and yield of safe assets increase.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 0.985 | – |
| 6.25% | 0.945 | -4.1% |
| 7.25% | 0.815 | -17.3% |
Do note that their dividend has been on a downtrend though it is still at a relative high yield. A more conservative estimate may be to assume that RS pays a dividend of MYR0.040 per quarter. When annualized, this amounts to MYR0.160 which translates to SGD0.048 and a dividend yield of 4.90%. This dividend yield would be lower than my expected yield.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Revenue | +17.3% | Favorable |
| Earnings per share | +30.2% | Favorable |
| Operating Cash Flows | +23.3% | Favorable |
| Gearing ratio | 11.4% | Favorable |
| Interest coverage | 7,632.6x | Favorable |
| Price to Book Ratio | 3.08 | Unfavorable |
| Overall | Favorable |
Overall, it remains Favorable to invest in RS. Do note however, that the overall result saw a decline as compared to the previous quarter. The earnings per share and operating cash flow are also insufficient to sustain a similar payout as the calendar year 2024. While RS is able to maintain their strong competitive advantage, investors will need to monitor if there are any changes to the dividends in the calendar year 2025.
Background
Riverstone Resources is established in year 1989, and still growing in their industry. With a history spanning close to 30 years, Riverstone has accumulated a huge network of stakeholders and expertise in their making. Being one of the leading manufacturers of cleanroom and medical industry, they manufacture top of the line healthcare gloves, nitrile gloves, finger cots, face masks, packaging bags etc.
Their products are widely qualified and used in the Hard Disk Drive (HDD), semiconductor and healthcare industries in Malaysia. On top of the achievements, Riverstone exports their products to key high technology countries around Asia, Europe and the American region.
Riverstone has been growing extensively, for the amazing recognition for their products around the world. To cope with growing demands, they have increased their capacity by setting up a new manufacturing plant in Thailand in year 2001, and another one in Wu Xi China in year 2004. Later in year 2010, they built a new plant in Taiping, equipped with only state of the art manufacturing facility to keep their promises for premium quality.
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