Green Packet turns EBITDA positive
PETALING JAYA: Green Packet Bhd turned EBITDA (earnings before interest, taxes, depreciation, and amortisation) positive to RM20,000 in the third quarter ended Sept 30, 2020 compared with an EBITDA loss of Rm6.45mil in the previous quarter.
Revenue was 12% quarter-on-quarter higher at Rm162.7mil.
In the quarter under review, the group’s loss after tax narrowed to Rm7.7mil (from Rm13.3mil in the previous quarter) mainly due to the settlement of the exchangeable medium-term notes (EMTNS) via the divestment of its interest in Webe Digital Sdn Bhd to Telekom Malaysia Bhd.
The settlement resulted in gross annual interest savings of Rm21mil and placed the group in a net cash position of Rm43.5mil as at Sept 30, 2020.
Its Communication segment also saw a turnaround, posting a positive EBITDA of RM100,000 this quarter, which was a 103% quarter-on-quarter jump increase, on the back of a 6% quarter-on-quarter revenue growth to Rm135.4mil.
Meanwhile, the Solution (software and devices) segment’s revenue grew by 73% to Rm25.9mil while recording a widened EBITDA loss to Rm8.5mil, of which RM7.9 mil was due to the MYTV project.
Stripping off the MYTV impact, EBITDA loss would have narrowed significantly from Rm4.1mil to Rm600,000mil quarter-on-quarter.
Its Digital Services segment’s revenue recorded a 44% drop to Rm1.4mil in the third quarter due to the expiry of a material contract, though EBITDA and loss after tax improved by 11% and 7% respectively, signifying improved margins.
For the nine months ended Sept 30, 2020, group revenue rose by 11% to Rm454.7mil compared with Rm407.9mil a year ago.
The Solution segment’s revenue grew 63% to Rm52.8mil, Digital Services by 57% to Rm6.9mil and Communication by 6% to Rm394.9mil.
Group managing director and CEO CC Puan is confident that the wave of digital transformation will drive Green Packet’s future prospects as more individuals, companies and governments are embracing the utilisation and adoption of digital services and processes.
“Green Packet is reinventing and reinvesting in our future as we are passionate to pursue life-improving digital innovations.
“We continue to look for opportunities to grow by leveraging on strategic partnerships.
Our collaboration with Tencent Cloud to offer cloud services in Malaysia, which is expected to go live by the first half in 2021, will see significant contribution to our Digital Services segment by 2022, as we continue to position ourselves to join the journey of accelerated growth in the digital economy while providing innovative technological solutions to benefit more people, enterprises and the public sector,” he said.
“In addition to cloud services, the group is also actively exploring potential joint ventures with domestic and regional players to set up a hyperscale data centre here, which will create a new sustainable recurring income for our Communication segment, augmenting its current global voice and data wholesale business.
“Meanwhile, our Solution segment is ready to launch the newly developed 5G customer-premises equipment (CPE) to tap and support the global roll-out of 5G networks,” he added.
Green Packet is closing its proposed acquisition of E-KYC solutions provider, Xendity.
There is also the recent proposed acquisition of 51% of T-melmax Sdn Bhd, a specialist firm in financial management software services from Censof Holdings Bhd.
These strategic acquisitions will enable Green Packet to further capitalise on the significant growth in the fintech space.
Another notable win for Green Packet in the third quarter was the collaboration with Mmantap Sdn Bhd, a wholly-owned subsidiary of MMAG Holdings Bhd to utilise the Kiplepay e-wallet and digital payment system and solution for 2.5 million foreign workers which Mmantap services.