Greetings, fellow investors and market enthusiasts! Today, we’re delving into the latest financial performance of **GREEN PACKET BERHAD** for its first quarter ended 31 March 2025 (Q1 FY2025). This report offers a glimpse into how the company is navigating a dynamic market, revealing both the challenges it faces and the strategic shifts it’s implementing. While the company recorded a significant decline in revenue for the quarter, it also managed to substantially reduce its quarterly losses, signaling a potential turn in its operational efficiency. However, the full-year picture still reflects an increase in losses. Let’s break down the numbers and understand the underlying narrative.
Financial Snapshot: Navigating Through a Shifting Landscape
Green Packet Berhad’s Q1 FY2025 results present a mixed bag. While revenue saw a notable decline, the company made strides in improving its quarterly profitability, significantly narrowing its losses compared to the same period last year. However, the cumulative performance over the past 12 months indicates persistent challenges.
Revenue Performance: A Steep Decline in a Transitional Period
The Group’s revenue for the current quarter experienced a significant contraction. This is primarily attributed to a challenging environment in its Communications business, which continues to be impacted by evolving market trends.
Current Quarter Revenue (31 Mar 2025)
RM45,533k
Previous Corresponding Quarter (31 Mar 2024)
RM141,909k
(68% decrease)
Cumulative Revenue (12 Months ended 31 Mar 2025)
RM458,965k
Previous Cumulative Period (12 Months ended 31 Mar 2024)
RM740,138k
(38% decrease)
Profitability: A Significant Reduction in Quarterly Losses, but Full-Year Challenges Persist
Despite the revenue decline, the company managed to drastically cut its quarterly losses, indicating improved cost management or a shift in business mix. However, the cumulative 12-month loss has widened.
Quarterly Loss After Tax (Attributable to Owners) (31 Mar 2025)
RM(2,305)k
Previous Corresponding Quarter (31 Mar 2024)
RM(12,806)k
(82% reduction in loss)
Cumulative Loss After Tax (Attributable to Owners) (12 Months ended 31 Mar 2025)
RM(14,271)k
Previous Cumulative Period (12 Months ended 31 Mar 2024)
RM(8,361)k
(71% increase in loss)
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), a measure of operational profitability, also showed a significant improvement in the current quarter, reflecting better control over operational expenses before non-cash charges and financing costs.
Quarterly EBITDA (31 Mar 2025)
RM(1,145)k
Previous Corresponding Quarter (31 Mar 2024)
RM(12,068)k
(91% reduction in loss)
Cumulative EBITDA (12 Months ended 31 Mar 2025)
RM(11,546)k
Previous Cumulative Period (12 Months ended 31 Mar 2024)
RM(3,960)k
(192% increase in loss)
Basic Loss Per Share (LPS) also reflects these trends:
Quarterly Basic LPS (31 Mar 2025)
(0.11) sen
Previous Corresponding Quarter (31 Mar 2024)
(0.64) sen
Cumulative Basic LPS (12 Months ended 31 Mar 2025)
(0.67) sen
Previous Cumulative Period (12 Months ended 31 Mar 2024)
(0.42) sen
Comparing the current quarter (Q1 FY2025) with the immediate preceding quarter (Q4 FY2024, ended 31 December 2024) provides further insights:
Revenue (Q1 FY2025)
RM45.53 million
Revenue (Q4 FY2024)
RM111.54 million
(59% decrease)
Loss After Tax (Q1 FY2025)
RM(2.31) million
Loss After Tax (Q4 FY2024)
RM(4.92) million
(53% reduction in loss)
The revenue decline from the preceding quarter is primarily due to lower inbound traffic on voice minutes and data from the Communications business.
Diving Deeper: Segmental Performance Insights
Understanding the performance of each business segment is crucial. Here’s a breakdown of revenue and EBITDA contribution for the current quarter compared to the same period last year:
| Segment | Q1 FY2025 Revenue (RM million) | Q1 FY2024 Revenue (RM million) | % Change (QoQ) | Q1 FY2025 EBITDA (RM million) | Q1 FY2024 EBITDA (RM million) | % Change (QoQ) |
|---|---|---|---|---|---|---|
| Digital Devices & Infrastructure | 0.12 | (0.09) | +228% | (0.23) | 8.19 | -103% |
| Communications | 43.77 | 140.23 | -69% | (0.43) | 30.95 | -101% |
| Digital & Financial Services | 1.46 | 1.48 | -1% | 0.94 | (5.20) | +118% |
| Corporate Unit | 0.18 | 0.29 | -37% | (1.42) | (46.01) | +97% |
- Digital Devices & Infrastructure: Recorded a significant 228% increase in sales this quarter. The negative revenue in the prior corresponding quarter was due to an audit adjustment for a cancelled invoice, making the current quarter’s positive figure a recovery from a low base.
- Communications: Experienced a substantial 69% drop in revenue. This is attributed to the ongoing shift in voice communication trends towards instant messaging and a more selective approach to A2P SMS wholesale due to declining margins.
- Digital & Financial Services: Remained relatively stable in revenue. Encouragingly, this segment swung to a positive EBITDA of RM0.94 million from a loss of RM5.20 million in the previous year, driven by reversal of provision for doubtful debts and capitalization of development costs.
- Corporate Unit: Saw lower revenue due to reduced interest income, but its EBITDA loss significantly narrowed, mainly due to the reversal of provision for doubtful debts and unrealised foreign exchange gain.
Balance Sheet and Cash Flow: Strengthening the Foundation
The company’s financial position at the end of Q1 FY2025 shows efforts to streamline and improve liquidity. Total assets decreased from RM232.51 million to RM141.60 million, while total liabilities also reduced from RM182.09 million to RM98.45 million. This led to a slight decrease in total equity from RM50.42 million to RM43.15 million, and net asset per share declining from 3 sen to 2 sen.
A positive development is the significant reduction in long-term borrowings, now at RM0 compared to RM3.08 million previously, and a decrease in total borrowings (including lease liabilities) from RM3.51 million to RM0.53 million. Cash and bank balances saw a healthy increase from RM7.52 million to RM17.44 million.
From a cash flow perspective, the company’s net cash used in operating activities significantly improved, shrinking from RM(20.38) million to a mere RM(0.05) million. Net cash from financing activities turned positive, largely due to proceeds from the issuance of ordinary shares, while net cash from investing activities remained positive, albeit lower than the previous year.
The company also provided an update on the utilisation of proceeds from its Private Placement Exercise, which raised RM9.46 million. As of 31 March 2025, approximately 50.1% of these proceeds have been utilised, mainly for funding for money lending business (93.3% utilised) and working capital (95.3% utilised). Funding for UJVA saw minimal utilisation (1.2%) before its termination, which we will discuss next.
Strategic Direction and Future Outlook
Green Packet Berhad is actively engaged in strategic initiatives to navigate its challenging environment and drive future growth. The company’s focus areas include:
- Digital & Financial Services Growth: Intensifying efforts to expand its customer base in this segment through strategic partnerships, securing high-value deals, and enhancing product and service offerings. This segment appears to be a key focus for future profitability.
- Operational Efficiency: A group-wide initiative to improve operational efficiency and bolster profit margins. The reduction in quarterly losses suggests some early success in this area.
- Corporate Exercises: Actively pursuing divestment of non-performing subsidiaries and securing strategic partnerships to unlock positive value for the Group.
However, the company also faces several headwinds and has undertaken significant corporate actions:
- The **Communications business** continues to face structural challenges due to the market’s shift away from traditional voice and SMS services. The company’s strategy to be more selective with A2P SMS wholesale customers indicates a focus on profitability over volume in this declining segment.
- The **termination of the Unincorporated Joint Venture Agreement (UJVA)** with Tass Tech International Sdn Bhd, related to a project in Sri Lanka, highlights the impact of external factors such as economic constraints, shifting government priorities, and regulatory uncertainties in certain overseas markets. This decision, while a setback for that specific project, allows the company to reallocate resources from a non-progressing venture.
- Recent corporate developments include a **change of auditors** (from Messrs Chengco, PLT to Moore Stephens Associates PLT) and a **change of financial year end** (from 31 March to 30 June, covering a 15-month period). These are administrative changes but important for stakeholders to note.
- The company also announced a **Proposed Share Capital Reduction** of RM340.0 million, a significant corporate exercise that will be closely watched by investors.
Summary and Outlook
Green Packet Berhad’s Q1 FY2025 report paints a picture of a company in transition. While the steep decline in revenue is concerning, the significant reduction in quarterly loss indicates an improving operational efficiency and cost management. The company is clearly pivoting towards its Digital & Financial Services segment for future growth, while strategically managing or divesting from less profitable areas like its traditional Communications business and non-progressing overseas ventures.
The ongoing corporate exercises, including the proposed capital reduction, reflect the Board’s commitment to restructuring and optimizing the company’s financial health. The increase in cash and cash equivalents and the reduction in borrowings are positive signs of balance sheet strengthening.
Key points to monitor in the coming quarters include:
- The progress and impact of the Digital & Financial Services segment’s growth initiatives.
- The effectiveness of operational efficiency improvements in translating into sustained profitability.
- The outcome and implications of the proposed share capital reduction and other corporate exercises.
- The company’s ability to adapt to the evolving landscape of the communications industry.
It’s clear that Green Packet Berhad is undergoing a significant transformation. The journey ahead will likely involve continued strategic adjustments and a keen focus on executing its plans to return to sustainable profitability.
What’s Your Take?
Green Packet’s latest report showcases a company actively working to reshape its future amidst challenging market conditions. The reduction in quarterly losses is a positive signal, but the overall revenue decline and increased cumulative loss highlight the scale of the transformation. Do you think Green Packet Berhad can successfully navigate these shifts and return to consistent profitability in the coming years? Share your thoughts in the comments below!
