KUALA LUMPUR (July 22): Paper-based packaging manufacturer HPP Holdings Bhd saw its earnings decline 30% year-on-year (y-o-y) to RM3.5 million in the fourth quarter ended May 31, 2022 (4QFY22), down from RM5 million a year ago, due to higher effective tax rate and lower revenue.

In a filing with Bursa Malaysia on Friday (July 22), HPP said its revenue for 4QFY22 dropped 16% to RM21.06 million, as compared with RM25.19 million a year before, due to lower contribution from corrugated packaging and trading of rigid box for the electrical and electronics industry.

HPP said the effective tax rate for 4QFY22 was higher, as certain expenses are not allowed for tax deduction purposes.

The group also mentioned that the effective tax rate was lower in the 4QFY21 because of tax savings arising from reinvestment allowance and reversal of overprovision of taxation in the prior year. 

For the full FY22, net profit halved to RM8.4 million from RM16.81 million in FY21, while revenue fell by 20% y-o-y to RM85.76 million from RM106.68 million.

Going forward, HPP said it will look into expanding the range of packaging products by offering innovative solutions that would appeal to its existing customers and to attract potential new customers.

HPP’s shares gained 2.5 sen or 5.75% to 46 sen on Friday, giving it a market capitalisation of RM178.68 million.