Core Financial Highlights: A Snapshot

Green Packet Berhad’s performance for the three months ended 31 March 2025 showed a notable improvement in loss reduction compared to the previous year’s corresponding quarter. However, a look at the cumulative 12-month performance reveals continued challenges on the revenue front.

Current Quarter Performance (3 Months Ended 31 March 2025 vs. 31 March 2024)

The Group’s revenue for the current quarter saw a significant decrease of 68% compared to the same quarter last year. Despite this, the loss after tax attributable to ordinary equity holders dramatically improved, reducing by 82% from RM12.81 million to RM2.31 million. This reduction in loss is a key positive for the quarter, indicating better cost management or reduced operational drains.

Full Financial Year Performance (12 Months Ended 31 March 2025 vs. 31 March 2024)

For the full financial year, Green Packet’s revenue declined by 38%, and unfortunately, the loss after tax widened by 71% to RM14.27 million. This indicates that while the most recent quarter showed improvement, the cumulative challenges over the year led to a higher overall loss.

Diving Deeper: Segmental Performance

Understanding the performance of each business unit provides a clearer picture of the Group’s dynamics:

• Digital Devices & Infrastructure: This segment saw a remarkable 228% increase in sales for the current quarter compared to the previous corresponding quarter. This significant jump is primarily attributed to an audit adjustment reversing a cancelled invoice from the prior period. However, for the full financial year, revenue for this segment decreased by 37%.
• Communications: This segment faced significant headwinds, with revenue dropping by 69% in the current quarter and 38% for the full financial year. The report attributes this to declining wholesale voice and SMS revenue, a clear reflection of the market’s shift towards instant messaging and internet-based communication. The business unit is now more selective with its customers to manage profitability.
• Digital & Financial Services: This business remained relatively stable in the current quarter, with a minor 1% decline in revenue compared to the previous corresponding quarter. For the full financial year, revenue saw an 18% decrease, mainly due to lower project implementation revenue. Positively, the EBITDA for this segment saw a significant improvement (swinging from a loss to a gain in the current quarter, and reducing loss for the full year) due to the reversal of provisions for doubtful debts and the capitalization of development costs.
• Corporate Unit: This unit recorded lower revenue in the current quarter (down 37%) due to reduced interest income. However, its EBITDA significantly improved, reducing its loss by 97% in the current quarter and 86% for the full year, primarily due to the reversal of doubtful debt provisions and unrealised foreign exchange gains.

Financial Health Check: Balance Sheet & Cash Flow

A look at Green Packet’s financial position reveals some key movements:

The company’s total assets and total liabilities have seen a significant reduction. While total equity decreased, it’s positive to note that the net asset per share attributable to ordinary equity holders actually increased to 3 sen from 2 sen, indicating a healthier per-share asset backing.

Cash Flow: A Positive Shift

Perhaps one of the most encouraging aspects of this report is the improvement in cash flow. The net cash used for operating activities significantly reduced from RM20.38 million in the previous 12-month period to only RM0.05 million in the current 12-month period. This indicates a strong effort in managing operational outflows. Furthermore, cash and cash equivalents at the end of the period increased to RM13.72 million from RM6.66 million, providing the company with more liquidity.

Navigating Risks and Charting Prospects

Green Packet Berhad acknowledges the challenging market environment, particularly within its Communications segment. The shift in consumer behavior from traditional voice and SMS to instant messaging platforms poses an ongoing risk to this business unit’s profitability.

To address these challenges and drive future growth, the Group is focusing on several key strategies:

• Strengthening Digital & Financial Services: The company aims to enhance and grow its customer base in this segment by forging strategic partnerships, securing high-value deals, and continuously improving its product and service offerings. This is a crucial pivot given the challenges in other segments.
• Improving Operational Efficiency: A group-wide initiative to boost operational efficiency is underway, with the goal of improving overall profit margins. This aligns with the observed reduction in quarterly losses.
• Strategic Corporate Exercises: Green Packet is actively engaged in corporate exercises, including divesting non-performing subsidiaries and securing strategic partnerships to unlock positive value for the Group. The recent termination of the Unincorporated Joint Venture Agreement (UJVA) in Sri Lanka, due to a lack of progress and challenging operating conditions, is a testament to this strategic realignment. The company also completed a private placement exercise, raising RM9.46 million, and has proposed a share capital reduction of RM340 million, pending approvals.

These strategic moves indicate a proactive approach to streamline operations, focus on higher-potential growth areas, and strengthen the company’s financial structure.