KUALA LUMPUR (April 19): HPP Holdings Berhad slipped into the red in the third quarter ended February 29, 2024 (3QFY2024) for the first time since its listing on the ACE market in January 2021, mainly due to commission payments of RM520,000 and a one-time compensation payment of RM400,000 million to foreign workers, in line with the group's adherence to its zero recruitment fee policy.

It posted a net loss of RM62,200 in 3QFY2024 compared to a net profit of RM1.53 million in the previous corresponding quarter, resulting in a loss per share of 0.16 sen for 3QFY2024 compared to earnings per share of 0.39 sen for 4QFY2023.

Revenue fell 14.1% to RM14.35 million from RM16.7 million a year ago, attributed to reduced revenue from non-corrugated packaging and rigid box segments for customers in the consumer electrical and electronics, contraceptive, and food and beverages industries.

The weak quarterly performance pulled the group's net profit for the cumulative nine-month period (9MFY2024) lower to RM1.73 million, a 71.24% decline from RM6.02 million in 9MFY2023, as revenue also fell 17.79% to RM50.98 million from RM62.02 million during the same period.

Moving forward, HPP will continue to broaden its product offerings and services to customers and pursue new business opportunities to grow its client base across all industries, both locally and overseas.

The group has expanded its product range to include paper pulp moulded packaging in response to growing environmental awareness and anticipates increased demand due to EU regulations promoting packaging recyclability by 2030.

"Under the current economic climate, we also acknowledge the need to exercise prudent credit management, cost optimization, and tight management of internal efficiencies to grow both our top and bottom-line results this financial year," it said.

Shares in HPP settled half a sen or 1.49% lower at 33 sen, valuing the group at RM126.3 million.