BP Plastics Holding Bhd (KLSE: BPPLAS) reported a significant decline in earnings for the first half of the financial year 2025 (1HFY25), with net profit plummeting 62% year-on-year (YoY) to RM6 million.

This performance accounts for only 19% of analysts’ full-year forecasts and 20% of consensus estimates. The company did not declare any dividend for the quarter.

Revenue for the period fell 13% YoY, primarily due to subdued global demand for stretch films—products that constitute over 70% of the company's revenue. Factors contributing to this downturn include ongoing trade tensions, tariff disruptions, and aggressive price dumping by regional competitors with excess inventory.

BP Plastics faces challenges

Export markets, which contribute more than 65% of BP Plastics' revenue, were particularly affected, although domestic sales remained relatively stable.

Analysts have revised their projections for the company, with revenue estimates now at RM377 million for 2025, reflecting an 18% decline from the previous year. Earnings per share (EPS) estimates have been adjusted to RM0.10, up from RM0.0576 in the previous year.

Consequently, the consensus price target for BP Plastics' stock has been lowered by 6.2% to RM0.98.

Looking ahead, BP Plastics faces challenges in the flexible plastic packaging industry, including global economic uncertainties, elevated costs, and supply-demand imbalances.

However, the company remains confident in the steady and growing demand for flexible packaging products and its ability to defend profitability.

Investors are advised to monitor the company's performance closely in the coming quarters to assess its recovery trajectory.