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Keyfield Earnings Mask Cash Flow Woes
21 Nov
Summary
- Keyfield's accrual ratio of 0.22 indicates profit exceeds free cash flow.
- Free cash flow was RM19 million, far less than RM173.9 million profit.
- Earnings per share show impressive three-year growth.
Keyfield International Berhad's financial performance has drawn scrutiny following a recent earnings announcement. An analysis of its accrual ratio, which measures how well profit is supported by free cash flow, reveals a concerning trend. For the twelve months ending September 2025, Keyfield reported an accrual ratio of 0.22, indicating that its statutory profit significantly outpaced its free cash flow.
Digging deeper into the numbers, Keyfield's reported free cash flow for the same period was RM19 million, a stark contrast to its statutory profit of RM173.9 million. This substantial difference suggests that the company's reported earnings may not fully reflect its underlying cash-generating capabilities, a point of concern for investors. Shareholders will be hoping for a strong rebound in free cash flow in the upcoming year.
Despite the immediate cash flow concerns, Keyfield International Berhad has a notable track record of growth in earnings per share over the last three years, which has been described as extremely impressive. While the current profit figures warrant caution, this historical EPS growth provides a more positive outlook for its future performance. Further analysis into margins, growth forecasts, and return on investment could offer more insights.
