Fast Energy Holdings Berhad (FAST, 0084), a midstream player in the oil and gas sector, has recently released a remarkable quarterly performance report. The highlight of this report is the historic high revenue achieved in the second quarter of this year. This marks a significant milestone for the company since its successful transformation in 2021, as it surpasses the RM100.00 million revenue mark for the first time.

Prior to venturing into the midstream oil and gas sector, the company was engaged in the manufacturing of mold cleaning rubber sheets and self-clinching fasteners. Following its transformation, the company rebranded from Techfast Holdings Berhad to Fast Energy Holdings Berhad. Today, the company's primary operations encompass the provision of oil bunkering services, vessel chartering, and trading of petroleum and commodities. It is worth noting that the company's operations span across the Asia Pacific region, with a notable presence in the main ports of the Peninsular and East Malaysia.

Now, let's delve into the highlights of FAST's recently published quarterly report.

Revenue Comparison (YoY +13.57%, QoQ +37.67%)

For the quarter ending June 30, 2023 (Q2 FY2023), the company achieved a revenue of approximately RM100.67 million, which reflects an increase of around 13.57% compared to the corresponding period last year, where the revenue was RM88.64 million. This significant growth in revenue can be attributed to the robust development in the oil bunkering and petroleum trading segments, along with substantial contributions from the smart devices division.

As a reference, FAST entered the smart devices business earlier this year in March. Specifically, the company was granted the exclusive distributorship of the FreeYond smartphone brand in Malaysia by Hong Kong's Great Work company.

Out of the RM100.67 million revenue, approximately RM97.08 million came from the oil bunkering services, vessel chartering, and petroleum trading business, while around RM3.49 million stemmed from the sales of FreeYond smart devices.

In comparison to the previous quarter, the company's revenue has significantly surged by around RM27.55 million or 37.67%. This surge is mainly attributed to the substantial increase in revenue from the smart devices business, which rose from around RM0.65 million in the previous quarter to approximately RM3.49 million, a growth of around 436.69%.

Net Profit Comparison (YoY -60.19%, QoQ +112.57%)

Despite the substantial growth in business, higher operational expenses led to a year-on-year reduction in net profit for this quarter by approximately RM0.62 million or 60.19% to around RM0.41 million. This can be attributed, in my opinion, to the relatively short period of time since the company entered the smart devices business, resulting in initial marketing and travel expenses that impacted the company's profit.

However, in comparison to the net loss of RM3.18 million in the previous quarter, the company managed to turn the tide and achieve a profit growth of around 112.57% in this quarter, reaching a net profit of RM0.41 million. Management has attributed this turnaround partly to foreign exchange gains.

Outlook

The completion of the second-phase acquisition of CCK Petroleum Sdn Bhd (CCKSB) has enabled FAST to hold a 70.00% equity interest. Consequently, CCKSB's performance will be consolidated within the company's performance scope. This acquisition also comes with a profit guarantee of RM5.00 million, of which RM1.75 million is attributable to FAST's 35% equity interest.

Amid the uncertain macroeconomic trends in 2023, management expresses a cautiously optimistic outlook for the oil bunkering, vessel chartering, and petroleum trading businesses. Additionally, for the newly ventured smart devices business, the company anticipates improved performance for the fiscal year ending December 31, 2023.

Furthermore, it is worth noting that FAST has recently proposed a fundraising initiative involving a "1-for-1" bonus issue, alongside a two-for-one bonus issue warrant. This move is aimed at expanding into the consumer electronics business, encompassing wholesale, distribution, and retail of consumer electronics products and related activities. Thus, I anticipate that the company will convene an extraordinary shareholders' meeting in the next month or by year-end to seek approval for this proposal.