Navigating the Headwinds: A Look at Ornapaer Berhad’s Q1 2025 Performance

Greetings, fellow investors! Today, we’re diving into the latest financial report from

for the first quarter ended 31 March 2025. While the numbers reflect a challenging period, the report also sheds light on the company’s strategic responses to market pressures.

A quick highlight that might catch your eye is the

, a testament to their commitment to shareholder returns amidst a tough operating environment. Let’s unwrap the details and see what’s truly shaping Ornapaer’s journey.

Q1 2025 Financial Highlights: A Mixed Bag

The first quarter of 2025 presented a demanding landscape for Ornapaer Berhad. Here’s a comparative look at the key financial figures for the three months ended 31 March 2025, against the same period last year:

The Group’s revenue saw a decrease of 9.28% to RM68.61 million from RM75.63 million in the corresponding quarter last year. This dip was primarily due to a lower average selling price for their products.

Gross profit also declined by 20.22%, reflecting the impact of reduced revenue and potentially higher input costs.

Profit before tax experienced a significant drop of 60.45%, falling to RM0.82 million from RM2.08 million. This considerable decline underscores the challenging operating conditions faced by the company.

Similarly, profit net of tax decreased by 66.96% to RM0.49 million from RM1.49 million.

Basic earnings per share mirrored the profit trend, coming in at 0.58 sen compared to 1.97 sen previously.

Segmental Performance: A Deeper Dive

Ornapaer Berhad operates across three main segments, and their individual performances shed more light on the overall results:

• Corrugated Board & Carton: This remains the primary revenue and profit contributor. However, its revenue decreased by 3.86% to RM74.02 million, and profit after tax declined significantly by 59.83% to RM0.77 million, compared to RM1.91 million in the same period last year. This was mainly due to lower average selling prices.
• Paper Stationery Products: This segment faced a tougher quarter, with revenue decreasing by 38.86% to RM4.62 million from RM7.56 million. Consequently, it reported a loss after tax of RM0.25 million, a stark contrast to the profit of RM0.10 million recorded in the prior year, primarily due to lower sales volumes.
• Property Development: This segment did not generate any revenue during the quarter under review.

Financial Health and Cash Flow

Moving to the balance sheet, as at 31 March 2025:

Total assets saw a slight decrease of 3.44% from RM348.42 million at the end of December 2024.

Total equity remained stable, showing a marginal increase of 0.21% to RM203.33 million. This reflects a healthy equity base relative to total assets.

Net assets per share attributable to owners of the parent also saw a positive movement, increasing by 2.26% to RM2.72.

One of the more encouraging aspects is the cash flow from operations:

Notably, the Group generated RM6.29 million in net cash from operating activities, a significant turnaround from the RM7.17 million used in operating activities during the same period last year. This shift from negative to positive cash generation from core operations is a positive sign, indicating improved operational efficiency in managing working capital despite the revenue decline.

Outlook: Navigating a Challenging Environment

Ornapaer Berhad acknowledges the challenging market conditions. The corrugated carton manufacturing industry is facing intense price competition due to overcapacity, coupled with slower demand growth. Adding to these pressures are rising operating costs, including higher minimum wages and the potential for an electricity price hike in the second half of 2025.

In response, the Board of Directors maintains a cautious outlook for the remaining periods of the financial year 2025. The Group is committed to aligning its business strategies, with a strong focus on cost optimization and enhancing operational efficiency to navigate this intensely competitive market environment.

Final Thoughts and Your Perspective

From a professional standpoint, while the top-line and bottom-line figures present a difficult picture, the improvement in operating cash flow is a vital sign of underlying operational discipline. The management’s cautious outlook is realistic, and their emphasis on cost control and efficiency is the right approach in such an environment. The key will be how effectively they can implement these strategies and whether market demand for their products will stabilize or improve.

What are your thoughts on Ornapaer Berhad’s Q1 2025 performance? Do you believe their focus on cost optimization and operational efficiency will be enough to turn the tide in the coming quarters? Share your insights in the comments below!