KUALA LUMPUR (April 22): Ornapaper Bhd said it plans to diversify into the property development and property investment business, as it expects this to contribute 25% or more to its future net profit.

The group said that while it remained focused on its existing business — corrugated boards and carton boxes, paper-based stationery products and logistics services — it has been actively seeking other business opportunities that could enhance long-term returns to its shareholders.

In a bourse filing on Monday, Ornapaper noted that in February, the group had completed the acquisition of two vacant parcels of leasehold land in Melaka Tengah from Faithview Group Development Sdn Bhd for RM30.75 million, cash.

“Melaka Tengah is the centre of Melaka’s business district and a hub for property development. Other than the tourism industry, the industrial sector is the main development catalyst and thus, boosts the residential and commercial sectors which are expected to remain stable in terms of existing and incoming supply,” it said.

The group’s net profit more than doubled in the financial year ended Dec 31 2023 to RM6.57 million, from RM2.48 million in the previous year, on the back of lower material costs, while revenue fell 15.36% to RM278.39 million from RM328.93 million due to the lower average selling price for its products.

Ornapaper said the proposed diversification will take immediate effect upon obtaining approval from its shareholders at its upcoming extraordinary general meeting.

Shares in Ornapaper closed two sen or 1.8% lower to RM1.09 on Monday for a market capitalisation of RM82.02 million. The counter has risen 19.78% year to date.