HPP 1Q net profit doubles y-o-y, helped by higher sales and forex

KUALA LUMPUR (Oct 20): ACE Market-listed HPP Holdings Bhd’s net profit doubled year-on-year to RM4.28 million for the first quarter ended Aug 31, 2022 (1QFY23), from RM1.98 million a year ago, due to higher sales and favourable foreign exchange (forex).

In a filing with the bourse on Thursday (Oct 20), the paper-based packaging manufacturer elaborated that the stronger earnings were carried by higher sales in Mexico and Thailand, while also benefiting from the depreciation of the ringgit against the US dollar, as it noted that sales in these two countries are mainly denominated in the greenback.

“In addition, there was also a higher interest income received by the group’s investment in short-term funds and fixed deposits, as well as higher sales of scrap paper and gain on forex,” the company added.

As a result, earnings per share jumped to 1.1 sen, from 0.51 sen.

Revenue for the quarter rose 30.84% to RM24.06 million, as compared to RM18.39 million a year earlier, mainly on the back of higher contributions from its non-corrugated packaging and manufacturing of rigid box segments.

“In line with the increase in revenue, the revenue contribution from [the] others segment also increased by approximately 41.18% to RM1.05 million, as compared to the corresponding financial quarter,” it added.

Going forward, HPP said it believes that the external demand for goods will remain stable, especially for consumer electrical and electronic (E&E) products.

“The group has also been actively expanding its clientele to diversify customers in other industries, instead of over-relying on certain customers in the consumer E&E industry,” it added.

Additionally, while fulfilling local market demand, HPP also continues to explore more business opportunities within the Asean region, it said.

“[With] all these initiatives and consistency in execution of the group’s strategies to manage both top and bottom lines, the [board] is confident that the group is well positioned to increase the volume of our overseas orders,” the company added.

Shares of HPP ended unchanged at 40 sen on Thursday, giving the company a market capitalisation of RM153.43 million.