Pro-Pac Packaging Limited (ASX:PPG) has released its 1H25 financial results, reporting a decline in revenue from continued operations of 10.1 per cent across the group at $142.9 million.

The company said this included the material impact of a $13.6 million reduction in sales to its major customer in the Middle East and a three per cent reduction in other volumes in the flexibles business.

Pro-Pac CEO and managing director Ian Shannon said, “Our revenue for the half year was $142.9 million, 10.1 per cent lower than the corresponding period of $158.9 million. This decline in revenue included the material impact of reduction in sales to our major customer in the Middle East of $13.6 million.

“Volumes across the flexibles business excluding the sales to our major customer were down 3.0 per cent reflective the challenging market conditions and weather conditions in Australia and New Zealand which impact on our agricultural volumes.

“Volumes in our specialty packaging business were up 0.6 per cent (excluding exited market categories), which is pleasing in a challenging market. EBITDA (pre AASB16) was a $6.4 million loss versus $1.2 million profit for 1HY24, however this was an improvement from 2H24 loss of $8.7 million.

Within its flexibles business, revenue decreased by 12.8 per cent to $108.6 million (2023: $124.5 million) during the half-year.

As for its industrial speciality packaging segment, revenue decreased by 0.6 per cent to $34.2 million (2023: $34.4 million), which included a $0.4 million reduction relating to non-core market segments.

The company said it looks to improve profitability in the face of challenging market conditions.

“Market conditions remain challenging with exchange rate movements likely to continue to impact on our results for 2H25,” Shannon said.

“The current trading results continue to perform below our expectations, and accordingly we are currently working with advisors to undertake a strategic review of our businesses and to explore and execute on plans for improved profitability and longer-term funding arrangements.

“We are pleased to have the ongoing support of our major shareholder, who provided a $13.0 million facility during the period, with the termination date being extended to 1 March 2026.”