Green Packet net loss narrows on investment fair value gain

Saturday 27 Apr 2024

KUALA LUMPUR (Aug 26): International technology, media, and telecommunications player Green Packet Bhd saw its net loss narrow to RM11.98 million in the second quarter ended June 30, 2020 (2QFY20), from RM34.07 million in the previous quarter.

This was despite the group's continuous heavy investment in the business development in Digital Services and the group’s engineering center of excellence in Chengdu, China.

Green Packet attributed the smaller net loss to fair value gain from a quoted investment of RM9 million, versus a fair value loss of RM17.25 million in 1QFY20, according to a filing with Bursa Malaysia today.

Quarterly revenue was also 1.41% lower quarter-on-quarter at RM144.99 million from RM147.05 million in 1QFY20.

On a year-to-year basis, its net loss rose from RM9.31 million, while revenue was 16.62% higher from RM124.33 million.

The higher revenue growth was driven by higher contributions from all segments.

The software and devices segment had the highest growth rate with an increase of 171% to RM15 million due to higher shipments to the ASEAN region, Europe, Middle East and Latin America.

The Digital Services segment’s revenue grew 68% to RM2.5 million thanks to its Perak Prihatin project, Kedah Ibu Darul Aman project, online ecommerce transactions and new SME merchants, while the Communication Services segment saw 9% more in revenue to RM127.5 million due to higher sales from the telecommunication carriers in the ASEAN region, Hong Kong and China.

For the cumulative six months ended June 30, 2020, Green Packet reported a wider net loss at RM46.06 million from RM23.2 million last year, despite the 31.39% increase in revenue to RM292.04 million from RM222.26 million.

On prospects, Green Packet said the board expects better performance for the current financial year, despite the impact of the COVID-19 pandemic, due to progressive market response to the rapid digital connectivity of workplace safety processes by both the private and public sectors.

Moving forward, Green Packet’s group managing director and chief executive officer Puan Chan Cheong, who is better known as CC Puan, said the accelerated adaptation of digital transformation is benefiting Green Packet as the Group is ready to serve companies in transforming to digitalisation.

“We look forward to working closely with Tencent as we continue to explore new ways to apply our technology in order to benefit more people. We are committed towards innovative technologies to help consumers gain access to inclusive digital services, creating greater value for society and bringing equal opportunities to the world,” he said in a statement today.

On Aug 18, 2020, Green Packet had announced investing an initial RM100 million under its collaboration with Tencent Cloud to set up a joint Internet data centre in Malaysia in which the initial investment will comprise the setting up of infrastructure, including a total of 600 servers, as well as the provision of software solutions.

Additionally, Green Packet has also launched KipleX, a co-creation innovation lab and early stage venture capital with fund allocation of RM50 million for early start-ups, which CC Puan says it will create close ecosystems of technology providers, customers and partners to support new innovation.

“It is envisioned that KipleX will be able to boost local businesses through convergence of next generation technologies such as 5G, Artificial Intelligence and Internet-of-Things harnessed by the power of Cloud Computing,” said CC Puan.

Another notable win for the group in 2QFY20 was the divestment of WeBe which subsequently cleared RM272 million debts that will allow the group to fund new growth initiatives which includes building a cloud computing business with Tencent Cloud, said Green Packet.

Shares of Green Packet closed one sen or 1.79% higher at 57 sen today, valuing the company at RM627.98 million. While the counter is about flat from 61 sen a year ago, it has plunged more than half from the high of RM1.44 on May 18 this year.