Is Iskandar Waterfront City Berhad (KLSE:IWCITY) Weighed On By Its Debt Load?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. Importantly, Iskandar Waterfront City Berhad (KLSE:IWCITY) does carry debt. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. If things get really bad, the lenders can take control of the business. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is Iskandar Waterfront City Berhad's Debt?

As you can see below, Iskandar Waterfront City Berhad had RM114.8m of debt at September 2025, down from RM388.2m a year prior. However, it also had RM21.2m in cash, and so its net debt is RM93.6m.

A Look At Iskandar Waterfront City Berhad's Liabilities

The latest balance sheet data shows that Iskandar Waterfront City Berhad had liabilities of RM472.5m due within a year, and liabilities of RM167.5m falling due after that. On the other hand, it had cash of RM21.2m and RM131.2m worth of receivables due within a year. So its liabilities total RM487.7m more than the combination of its cash and short-term receivables.

The deficiency here weighs heavily on the RM262.5m company itself, as if a child were struggling under the weight of an enormous back-pack full of books, his sports gear, and a trumpet. So we definitely think shareholders need to watch this one closely. After all, Iskandar Waterfront City Berhad would likely require a major re-capitalisation if it had to pay its creditors today. There's no doubt that we learn most about debt from the balance sheet. But it is Iskandar Waterfront City Berhad's earnings that will influence how the balance sheet holds up in the future. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

See our latest analysis for Iskandar Waterfront City Berhad

In the last year Iskandar Waterfront City Berhad had a loss before interest and tax, and actually shrunk its revenue by 81%, to RM26m. To be frank that doesn't bode well.

Caveat Emptor

Not only did Iskandar Waterfront City Berhad's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost a very considerable RM30m at the EBIT level. When we look at that alongside the significant liabilities, we're not particularly confident about the company. It would need to improve its operations quickly for us to be interested in it. It's fair to say the loss of RM30m didn't encourage us either; we'd like to see a profit. And until that time we think this is a risky stock. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. For instance, we've identified 2 warning signs for Iskandar Waterfront City Berhad (1 shouldn't be ignored) you should be aware of.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.