L&P Global Bhd reported weaker earnings at RM104.4 million for the nine-month period up to September 2024 due to reduced demand from customers in the renewable energy sector, but the company has broaden its customer base to increase revenue streams in addition to seeking potential growth via merger and acquisition (M&A), according to a press release dated Nov 13 from the company.

Executive Director and Chief Executive Officer of L&P Ooi Lay Pheng said, "The current macroeconomic challenges have significantly impacted key customer industries, particularly renewable energy, leading to increased cost rationalisation among customers in these sectors. Despite these external pressures, we are encouraged by stronger sales momentum in sectors like electronics, semiconductors, medical, and logistics. However, volume growth in these sectors has not yet fully compensated for the decline from renewable energy customers. We remain steadfast in supporting our customers through this period and are confident in renegotiating more favourable terms as market conditions improve in the near future."

"We are also actively engaging with new prospective customers and have successfully secured 34 new customers this year. This will be laying the groundwork for future growth and to further diversify beyond the renewable energy sector," she added.

In the press statement, L&P announced its third quarter and nine-month year-to-date (YTD) results for financial year 2024.

During the first nine months of 2024, L&P recorded a revenue of RM104.4 million, compared to RM123.1 million in the corresponding period in 2023. This was primarily due to reduced demand for pallets, boxes and crates from customers in the renewable energy sector, as noted earlier.

Boxes and crates remained the group's primary revenue source, amounting to 72.9% of total revenue, while pallets contributed 22.3%. The remaining revenue was generated from circular supply and trading services.

Geographically, Malaysia made up 81% of total revenue, with Vietnam maintaining a stable contribution of 19%.

YTD net profit stood at RM9 million compared to RM15.7 million recorded in the previous year. This decline reflects a decrease in revenue, which offset the cost advantage and operational efficiency previously achieved through economies of scale.

Additionally, L&P recognised a net foreign exchange loss of RM1.9 million during the nine-month period, in contrast to a net gain of RM1.1 million in the corresponding period last year.

Meanwhile, in the third quarter of 2024, L&P recorded a revenue of RM31.7 million and a net profit of RM700,000.

On balance sheet strength, L&P remains a net cash position with a cash and bank balance of RM54.7 million, exceeding total borrowings of RM27.6 million as of Sept 30, 2024. The group generated a consistently healthy net operating cash flow of RM25.2 million for the first nine months of 2024.

L&P, formerly known as Berjayapak International Holdings Sdn Bhd, is an integrated industrial packaging solutions provider. L&P designs and manufactures wooden industrial packaging products comprising boxes, crates and pallets. It also provides packing services, circular supply services and trading of related products and raw materials.