Kandal M Venture Limited Announces Financial Results, including Higher Revenues and Gross Profits, for Full Year Fiscal Year Ended March 31, 2025

Rhea-AI Summary

Kandal M Venture Limited (Nasdaq: FMFC), a Cambodian contract manufacturer of luxury leather goods, reported financial results for FY ended March 31, 2025. Revenue increased 23% to $17.19 million from $13.97 million in FY2024, driven by post-pandemic market recovery and increased sales volumes.

The company recently completed its IPO on June 26, 2025, raising $9.2 million through the sale of 2.3 million Class A ordinary shares at $4.00 per share, including full exercise of the over-allotment option. However, net income declined 81.3% to $209,673, primarily due to increased costs and one-off IPO expenses. Gross profit margin decreased to 19.5% from 24.1% due to product mix changes and higher production costs.

Positive

• Revenue growth of 23% year-over-year to $17.19 million
• Successful IPO completion raising $9.2 million in gross proceeds
• Positive operating cash flow of $2.13 million
• Sales volumes increased across all customer accounts

Negative

• Net income declined 81.3% to $209,673
• Gross profit margin decreased by 4.6 percentage points to 19.5%
• Professional services fees increased 1,094.5% due to IPO-related expenses
• Cost of sales increased 30.4%, outpacing revenue growth

Insights

Financial Analyst

Kandal's FY2025 shows mixed results: 23% revenue growth but 81.3% profit decline due to margin compression and IPO costs.

Kandal M Venture Limited presents a mixed financial picture in its FY2025 results. While the company achieved impressive revenue growth of 23% (reaching $17.19 million from $13.97 million), profitability metrics reveal significant challenges. The gross profit margin contracted substantially by 4.6% to 19.5%, attributed to production inefficiencies with new designs, increased quality control staffing, and higher material costs.

The most concerning metric is the dramatic 81.3% decrease in net income to just $209,673 from $1.12 million in the prior year. This precipitous decline stems from two main factors: compressed margins and a massive 1,094.5% increase in professional services fees to $897,608, primarily due to one-time IPO-related expenses.

The company's successful IPO on Nasdaq (raising $9.2 million gross proceeds including the fully-exercised overallotment) provides crucial growth capital but also indicates the significant costs associated with going public. The positive cash flow from operations of $2.13 million demonstrates underlying business viability despite profit challenges.

Strategically, Kandal's position as a contract manufacturer in the affordable luxury leather goods market suggests vulnerability to margin pressures and client demands. Management's vague reference to "exciting developments" and expansion plans will require careful execution to reverse the concerning profit trajectory while leveraging their new public company status and capital infusion.

TA KHMAU, Cambodia, July 30, 2025 (GLOBE NEWSWIRE) -- Kandal M Venture Limited (Nasdaq: FMFC) (“Kandal” or the “Company”), a contract manufacturer of affordable luxury leather goods with manufacturing operations in Cambodia, today announced its financial results for its Full Year Fiscal Year Ended March 31, 2025.

Recent developments:

On June 26, 2025, the Company completed its initial public offering of 2,000,000 Class A ordinary shares at a public offering price of $4.00 per share. The Class A Ordinary Shares began trading on the Nasdaq Capital Market on June 25, 2025, under the symbol “FMFC.”

On July 16, 2025, the Underwriter exercised its over-allotment option in full to purchase an additional 300,000 Class A ordinary shares at the public offering price of $4.00 per share, resulting in additional gross proceeds of $1.2 million, before deducting underwriting discounts and other related expenses. After giving effect to the full exercise of the over-allotment option, the total number of Class A ordinary shares sold by the Company in the Offering has increased to 2,300,000 Class A ordinary shares and the gross proceeds increased to $9.2 million, before deducting underwriting discounts and other related expenses. The over-allotment option closing date was July 16, 2025.

Management Commentary

“We are pleased that we completed our IPO on Nasdaq on June 25 of this year as our company enters a new phase of growth and increased global recognition,” said Mr. Duncan Miao, Director and Chairman of the Board of Kandal. “Looking ahead, we have exciting developments that we will announce as we expand our global presence and enhance our production, design and development capabilities.”

Revenue

For the years ended March 31, 2025 and 2024, revenue was generated primarily from handbags sales.

Revenue increased by US$3,214,934 or approximately 23.0%, from US$13,971,743 for the year ended March 31, 2024 to US$17,186,677 for the year ended March 31, 2025. This increase reflects ongoing business growth and the sustained recovery of the global handbag market following the pandemic. Sales volumes rose across all existing customer accounts.

Cost of sales

Cost of sales primarily comprises raw material costs, direct labor costs and factory overheads. Cost of sales increased by US$3,224,831 or approximately 30.4%%, from US$10,604,640, for the year ended March 31, 2024 to US$13,829,471 for the year ended March 31, 2025.

Gross profit and gross profit margin

Gross profit decreased by US$9,897 or approximately 0.3%, from US$3,367,103, for the year ended March 31, 2024 to US$3,357,206 for the year ended March 31, 2025. The gross profit margin decreased by approximately 4.6 percentage points, from approximately 24.1% for the year ended March 31, 2024 to approximately 19.5% for the year ended March 31, 2025. This reduction was mainly due to shift in product mix, additional production supervisors and quality control personnel, lower efficiency from production of new designs, as well as higher indirect material costs and overheads.

Selling and distribution expenses

Selling and distribution expenses included export expenses, trucking costs and customs clearance fees. These expenses remained relatively stable at US$239,013 and US$304,406, amounting to approximately 1.7% and approximately 1.8% of revenue, for the years ended March 31, 2024 and 2025, respectively.

Professional services fees

The Company’s professional services fees consist mainly of fees paid to external lawyers and consultants. Professional services fees increased by US$822,461 or approximately 1,094.5% from US$75,147 for the year ended March 31, 2024 to US$897,608 for the year ended March 31, 2025, which was primarily due to one off IPO fees, financial advisor fees, legal fees, and audit fees during the year.

Cash generated from operating activities

Cash inflow from operating activities was principally from receipt of sales. Cash outflow used in operating activities was principally for payment of purchases of raw materials, staff costs and other operating expenses.

For the year ended March 31, 2025, the Company had net cash generated from operating activities of US$2,134,565 mainly arising from net profit from operations of US$228,954, as adjusted for non-cash items and changes in operating assets and liabilities. Adjustments for non-cash items primarily consisted of (i) depreciation of property, plant and equipment of US$193,626; (ii) depreciation of right-of-use assets of US$69,241; (iii) write down of inventories of US$8,879; (iv) interest expenses of US$595,421; (v) interest income from loan to related party of US$370,705; (vi) provision for expected credit loss on VAT refundable of US$71,188; and (vii) write-off of VAT refundable of US$35,120. Changes in operating assets and liabilities mainly include (i) the increase in trade and other receivables of US$659,095; (ii) the decrease in inventories of US$147,511; and (iii) the increase in trade and other payables of US$1,958,462.

Net income

Consequently, net income decreased by US$909,859 or approximately 81.3% from US$1,119,532 for the year ended March 31, 2024 to US$209,673 for the year ended March 31, 2025, mainly due to the increased cost of goods sold, and one-off IPO expenses incurred during the year ended March 31, 2025.

About Kandal M Venture Limited

Kandal M Venture Limited is a contract manufacturer of affordable luxury leather goods with its manufacturing operations in Cambodia. Kandal M Venture Limited primarily manufactures handbags, such as shoulder bags, crossbody bags, tote bags, backpacks, top-handle handbags, satchels, and other smaller leather goods, such as wallets.

For more information, please visit the Company’s website at www.kandalmv.com.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. The Company cautions investors that actual results may differ materially from the anticipated results, and encourages investors to read the risk factors contained in the Company’s final prospectus and other reports it files with the SEC before making any investment decisions regarding the Company’s securities. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law.

Contacts:

Company:
Kandal M Venture Limited Investor Relations Contact:
Padachi Village, Prek Ho Commune, Takhmao Town, Kandal Province,
Kingdom of Cambodia
Email: enquiry@fmfco.com.kh
Telephone: +855 23425205

Investor Relations Contact:
Skyline Corporate Communications Group, LLC
Scott Powell, President
1177 Avenue of the Americas, 5th Floor
New York, New York 10036
Office: +1 (646) 893-5835 x2
Email: info@skylineccg.com
Website: www.skylineccg.com

FINANCIAL STATEMENTS
KANDAL M VENTURE LIMITED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
		March 31, 2024				March 31, 2025
		US$				US$
Revenue			13,971,743				17,186,677
Cost of sales			(10,604,640	)			(13,829,471	)
Gross profit			3,367,103				3,357,206
Operating expenses:
Selling and distribution expenses			(239,013	)			(304,406	)
General and administrative expenses			(1,646,043	)			(2,677,883	)
Income from operations			1,482,047				374,917
Other income/(expenses):
Interest expense			(403,723	)			(582,013	)
Other income			219,309				436,050
Profit before income tax			1,297,633				228,954
Income tax expense			(178,101	)			(19,281	)
Profit for the year			1,119,532				209,673
Other comprehensive income:
Items that may be classified subsequently to profit or loss
Exchange differences on translating foreign operations			(313	)			—
Total comprehensive income attributable to equity owners of the Company			1,119,219				209,673
Earnings per share attributable to owners of the Company
Basic and diluted earnings per share			0.07				0.01
Weighted average number of ordinary shares used in computing basic and diluted earnings*			16,000,000				16,000,000

KANDAL M VENTURE LIMITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
		March 31, 2024				March 31, 2025
		US$				US$
ASSETS
Non-current assets
Property, plant and equipment			689,517				512,601
Right-of-use assets			207,724				138,483
Deferred tax assets			13,629				29,787
Total non-current assets			910,870				680,871
Current assets
Inventories			1,802,723				1,646,333
Trade and other receivables			945,030				1,497,817
Deferred initial public offering (“IPO”) costs			230,642				795,771
Amounts due from related parties			2,053,318				1,053,708
Loans to related parties			4,001,174				4,291,215
Cash and bank balances			235,348				102,697
Total current assets			9,268,235				9,387,541
Total assets			10,179,105				10,068,412
EQUITY AND LIABILITIES
Equity attributable to owners of the Company
Share capital*			160				160
Merger reserve			13				13
Capital reserve			(2,500,000	)			(2,500,000	)
Foreign currency translation reserve			5,130				5,130
Retained earnings			2,663,128				2,872,801
Total (deficit) equity			168,431				378,104
Non-current liabilities
Lease liabilities			168,549				87,632
Borrowings			4,360,385				—
Total non-current liabilities			4,528,934				87,632
Current liabilities
Trade and other payables			2,466,368				4,424,830
Lease liabilities			74,715				80,916
Borrowings			2,823,729				5,088,600
Income tax payable			116,928				8,330
Total current liabilities			5,481,740				9,602,676
Total liabilities			10,010,674				9,690,308
Total equity and liabilities			10,179,105				10,068,412

KANDAL M VENTURE LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS
		March 31, 2024				March 31, 2025
		US$				US$
Cash flows from operating activities
Profit before income tax			1,297,633				228,954
Adjustments for:
Depreciation of property, plant and equipment			198,360				193,626
Depreciation of right-of-use assets			69,241				69,241
Interest expense			421,713				595,421
Interest income from loan to related party			(165,368	)			(370,705	)
Inventories write-down			65,770				8,879
Provision for expected credit losses – other receivables			11,532				71,188
Other receivables written off			—				35,120
Operating cash flows before working capital changes			1,898,881				831,724
Changes in working capital:
Inventories			1,519,269				147,511
Trade and other receivables			(112,572	)			(659,095	)
Trade and other payables			(43,699	)			1,958,462
Cash generated from operations			3,261,879				2,278,602
Income tax paid			(123,111	)			(144,037	)
Net cash generated from operating activities			3,138,768				2,134,565
Cash flows from investing activities
Purchase of plant and equipment			(22,972	)			(16,710	)
Deferred initial public offering (“IPO”) costs			(230,642	)			(565,129	)
Net cash used in investing activities			(253,614	)			(581,839	)
Cash flows from financing activities
(Loans to)/repayment from related parties			(3,783,461	)			80,664
(Advances to)/repayments from related parties, net			(5,110,245	)			999,610
Proceeds from/(Repayments of) borrowings, net			6,373,131				(2,095,514	)
Interest paid on borrowings			(399,226	)			(578,660	)
Payment of lease liabilities			(68,989	)			(74,716	)
Interest paid on lease liabilities			(22,487	)			(16,761	)
Net cash used in financing activities			(3,011,277	)			(1,685,377	)
Net change in cash and cash equivalents			(126,123	)			(132,651	)
Cash and cash equivalents at beginning of year			361,471				235,348
Cash and cash equivalents at end of year			235,348				102,697

FAQ

What were Kandal M Venture's (FMFC) key financial results for FY 2025?

For FY 2025, Kandal reported revenue of $17.19 million (up 23%), net income of $209,673 (down 81.3%), and a gross profit margin of 19.5% (down from 24.1%).

How much did Kandal M Venture (FMFC) raise in its IPO?

Kandal raised $9.2 million in gross proceeds through its IPO, selling 2.3 million Class A ordinary shares at $4.00 per share, including the full exercise of the over-allotment option.

What caused the decline in Kandal M Venture's (FMFC) net income for FY 2025?

The 81.3% decline in net income was primarily due to increased cost of goods sold and one-off IPO expenses, including significant increases in professional services fees.

What were the main factors affecting FMFC's gross profit margin in FY 2025?

The gross profit margin declined to 19.5% due to shifts in product mix, additional production supervisors, lower efficiency from new design production, and higher indirect material costs and overheads.

How much operating cash flow did Kandal M Venture (FMFC) generate in FY 2025?

The company generated $2.13 million in net cash from operating activities, primarily from net profit from operations of $228,954 and adjustments for non-cash items and working capital changes.