WITH its diversification into construction, project management, and related activities starting to bear fruits, Main Market-listed plywood products maker Annum Bhd (formerly Cymao Holdings Bhd) can expect to remain in the black over the longer term.
The company is poised to leverage its key management’s competency, extensive experience and lean organisation management to ensure its construction division remains profitable.
Even as the first half of the year was bogged down by the reintroduction of the movement control order (MCO 3.0), the group is confident that the gradual reopening of the economy will help to escalate the progress of its construction business.
Annum is currently involved in two construction projects in Penang and Perak which could potentially be worth RM254.02 mil.
“We are optimistic about securing and finalising the RM120 mil deal with Ageson Development Sdn Bhd as the main contractor in a proposed mixed development project in Penang which marks our maiden foray into the construction space,” the company pointed out in a statement.
“Having signed a memorandum of understanding with Ageson at the beginning of this year, we are confident that the deal will be clinched and finalised with the current lockdown lifted in phases.”
Additionally, the group will also kickstart its construction job in Perak after having secured a contract worth RM134.02 mil to undertake site clearance, hoarding and earthworks for a proposed mixed development in Perak.
“We are excited with our new ventures to be key earnings catalyst for our group in the near-term. The secured projects are vital to our profile in the industry,” noted the company.
Agile management
As it is, Annum has successfully staged a turnaround for its 2Q FY2021 ended June 30, 2021 with a net profit of RM7.9 mil against a net loss of RM2.1 mil in the previous year’s corresponding quarter.
This was achieved on the back of an audited quarterly revenue which jumped almost 10 times to RM40.4 mil from RM4.2 mil during the period under review.
The company attributed its topline growth to a surge in the sales of plywood and polyester plywood. This has boosted earnings during the quarter, supported by the successful restructuring strategy by the management to reduce its operating expenses and focus on trading of the plywood products.
For its 6M FY2021, the group posted a net profit of RM15.8 mil on the back of higher revenue of RM86.5 mil from a loss-making position of -RM4.5 mil a year ago while its revenue stood at only RM19.4 mil.
“Our strong financial performance during 1H FY2021 is a reflection of the hard work and effort that the management has put in,” the company noted.
“We are optimistic that the continuation of a more agile management will help to increase team productivity and satisfaction. This will, in turn, improve the cash flow and maximise our business capacity going forward.”
At the close of trading today, Annum was up 7 sen or 7.61% to 99 sen with 1.11 million shares traded, thus valuing the company at RM74 mil. – Aug 23, 2021
