BOX-PAK (Malaysia) BHD. Navigates Challenging Q1 2025: A Deep Dive into Their Latest Financials
Malaysia’s corrugated carton packaging giant, BOX-PAK (Malaysia) BHD., has just released its unaudited financial results for the first quarter ended 31 March 2025. This report paints a picture of a company grappling with significant market headwinds, transitioning from a profit to a loss. However, a closer look reveals strategic efforts and pockets of resilience that warrant attention from Malaysian retail investors.
While the headline figures show a noticeable decline in profitability, the report also outlines the company’s proactive measures to navigate these challenging times. Let’s break down the numbers and understand what this means for BOX-PAK’s journey ahead.
Core Data Highlights: A Quarter Under Pressure
The first quarter of 2025 proved to be a demanding period for BOX-PAK, with key financial metrics experiencing significant downturns compared to the same period last year. The industry’s intense competition and economic slowdowns in key markets have clearly impacted the top and bottom lines.
Revenue Performance
BOX-PAK’s revenue saw a dip, primarily due to increased competition and seasonal factors in Vietnam and Malaysia.
Q1 2025 Revenue
RM 145.99 million
Q1 2024 Revenue
RM 157.36 million
This represents a 7.2% decrease in revenue compared to Q1 2024. The decline was largely attributed to lower sales tonnage and a drop in average selling prices, especially at the Ho Chi Minh plant, coupled with the impact of festive seasons.
Profitability Plunge
The most striking aspect of this quarter’s performance is the significant contraction in profitability, leading to a net loss for the period.
Q1 2025 Gross Profit
RM 10.46 million
Q1 2024 Gross Profit
RM 16.79 million
Gross profit plummeted by a substantial 37.7%. This was mainly due to lower average selling prices driven by intense industry competition in Batu Caves and Ho Chi Minh. Furthermore, insufficient sales volumes at the Senai and Hanoi plants meant they couldn’t cover fixed overheads, resulting in gross losses in those segments.
Q1 2025 (Loss) Before Tax
RM (5.66) million
Q1 2024 Profit Before Tax
RM 3.01 million
The Group recorded a pre-tax loss of RM 5.66 million, a sharp reversal from the RM 3.01 million profit in the corresponding quarter last year, marking a staggering 287.9% decline.
Q1 2025 (Loss) for the Period (Net Loss)
RM (6.03) million
Q1 2024 Profit for the Period
RM 2.44 million
Consequently, the net result for the period was a loss of RM 6.03 million, a 347.2% deterioration from the RM 2.44 million profit in Q1 2024. This translates to a basic loss per share of 5.02 sen, compared to a profit per share of 2.03 sen previously.
Segmental Performance: A Mixed Bag
While the overall picture shows a decline, the segmental breakdown offers more granular insights:
| Segment | Q1 2025 Revenue (RM’000) | Q1 2024 Revenue (RM’000) | Change (%) | Q1 2025 Segment Result (RM’000) | Q1 2024 Segment Result (RM’000) |
|---|---|---|---|---|---|
| Malaysia | 40,258 | 49,267 | -18.3% | (3,402) (Loss) | 4,334 (Profit) |
| Vietnam | 86,389 | 96,563 | -10.5% | (3,879) (Loss) | 907 (Profit) |
| Myanmar | 19,341 | 11,531 | +67.7% | 4,766 (Profit) | 886 (Profit) |
The strong growth in Myanmar, with revenue up by 67.7% and a significant increase in segment profit, was a clear bright spot. This was attributed to higher sales tonnage and improved average selling prices. However, this growth was insufficient to offset the substantial revenue and profit declines in Vietnam and Malaysia, which were hit by intense competition and lower average selling prices.
Financial Health and Cash Flow
As at 31 March 2025, the Group’s total assets stood at RM 459.36 million, a decrease from RM 495.37 million at the end of 2024. Total equity also saw a decline to RM 81.45 million from RM 94.35 million. Consequently, net assets per share decreased to RM 0.68 from RM 0.79.
Despite the challenging profit figures, there’s a silver lining in the cash flow statement. The Group generated RM 1.82 million from operating activities, a significant turnaround from the RM 8.28 million cash used in operations in Q1 2024. This indicates improved working capital management. Similarly, net cash from financing activities turned positive at RM 0.72 million, compared to a significant outflow of RM 40.10 million in the prior year’s quarter. This improvement in cash management is a positive sign of operational resilience amidst a difficult quarter.
Risks and Prospects: Navigating a Competitive Landscape
The corrugated carton box industry is inherently competitive, and BOX-PAK acknowledges the ongoing challenges. The report highlights several key factors impacting their performance and outlook:
- Intense Competition: The industry is crowded with numerous players, leading to pricing pressures and lower average selling prices, as seen in Malaysia and Vietnam.
- Cost Inflation and FX Volatility: Managing inflationary cost impacts and the volatility of the Malaysian Ringgit against the US Dollar remains a significant challenge, directly affecting raw material costs and profitability.
- Economic Dependency: Demand for secondary packaging like corrugated cartons is highly sensitive to the economic conditions of the countries where BOX-PAK operates. The slowdown in exports and economic headwinds in Vietnam, in particular, have directly impacted carton packaging demand.
Despite these hurdles, the Board of Directors remains cautiously optimistic about addressing these challenges in 2025. They have outlined several strategic measures to improve performance:
- Business Development: Allocating additional resources to increase sales volume and orders from both existing and new customers.
- Inventory Management: Focusing on improving inventory control and rationalizing paper roll purchases to optimize costs.
- Production Efficiency: Enhancing production efficiencies by reducing wastages and increasing process automation to lower overhead costs.
- Cash Flow Focus: Increasing emphasis on sales and collections to free up cash flow for the Group’s operations.
- Employee Development: Continuous skills development for employees across sales, production, and procurement divisions to boost productivity and efficiency.
These strategies aim to build resilience and drive improvement in a challenging market environment.
Summary and
BOX-PAK (Malaysia) BHD. has certainly faced a tough first quarter in 2025, with a notable shift from profit to loss, primarily driven by intense competition and economic slowdowns in key markets like Vietnam and Malaysia. The decline in revenue, gross profit, and net profit underscores the significant pressures on the packaging industry.
However, it’s crucial to acknowledge the positive strides in cash flow management, with operating and financing cash flows showing a marked improvement compared to the previous year. This suggests that while profitability is under pressure, the company is actively managing its liquidity and operational efficiency.
The company’s strategic initiatives, focusing on business development, cost control through inventory and production efficiency, and robust cash flow management, demonstrate a proactive approach to navigating the headwinds. The strong performance of the Myanmar segment also offers a glimmer of hope, showcasing potential growth areas for the Group.
Key risk points to consider for BOX-PAK’s future performance include:
- The continued intense competition in the corrugated carton industry, which could further pressure pricing.
- The volatility of raw material costs and foreign exchange rates, particularly the Malaysian Ringgit against the US Dollar.
- The economic conditions in key operating countries, especially the recovery or further slowdown in Vietnam’s export sector.
- The effectiveness and timeliness of the outlined strategic initiatives in translating into improved financial performance.
Looking ahead, the success of BOX-PAK will largely depend on its ability to execute these strategies effectively and adapt to the dynamic market conditions. The Board’s cautiously optimistic stance reflects the challenging yet manageable landscape they are operating within.
What’s Your Take?
This quarter’s report for BOX-PAK (Malaysia) BHD. highlights the real-world impact of market dynamics on a long-standing player. While the profitability dip is concerning, the improvements in cash flow and the clear strategic roadmap are encouraging signs that management is not standing still.
Do you think BOX-PAK’s current strategies are robust enough to overcome the industry headwinds and return to profitability in the coming quarters? Share your thoughts in the comments below!
Stay tuned for more analyses on Malaysian companies and market trends.
