TIMBER-BASED NWP Holdings Bhd has moved past legal tussles involving its board of directors with the dropping of legal suits following the reshuffling of its boardroom members.
On March 21, the company appointed its largest shareholder Datuk Tan Lik Houe as its non-independent non-executive director while his daughter Tan Jyy Yeen was made an executive director. Aside from that, Datuk Yeo Chai Poh was also named as an independent non-executive director (INED).
“We are looking ahead on measures to drive recovery for the group following the legal issues within the group,” commented Tan. “On March 28, at the advice of our legal team, Originating Summons (OS) No. WA-24NCC-55-01/2022 has been withdrawn. We are glad that we will turn over a new page.”
On Feb 7, NWP and five of its directors were served with the OS filed by the company’s former managing director Datuk Seri Kee Soon Ling and ex-INED Yew Onn Chong which among others, sought their relief from suspension as directors of the company and to be restrained from attending board meetings.
With the uncertainties and infighting within the group settled, NWP can now look forward to tap into the surge in demand for its timber manufacturing business amid the re-opening of international borders and economic recovery.
According to Tan, the demand for furniture has surged over the past one year with an increase in timber prices poised to benefit NWP by allowing the group to record a turnaround in its upcoming financial year.
NWP incurred a net loss amounting to RM8.2 mil for its nine-month FY2/2022 ended Nov 30, 2021 with a revenue of RM2.35 mil (there is no basis for comparison as the company has changed its financial year-end to Feb 28 from Aug 31 as per a Bursa Malaysia filing dated Aug 21, 2020).
“We remain very focused on our existing core business which is timber manufacturing,” Tan pointed out. “Since the re-opening of the economy, we have seen an increase in orders for our timber business, led by the surge in demand for furniture.”
Partly due to the return to workplace, the pricing of timber has shot up by 20% from its average selling price in 2021. “This would benefit the group as we are optimistic that both the strong demand and pricing will drive the turnaround for NWP in the upcoming financial year,” projected Tan.
More specifically, he shared that orders from China are also particularly strong, hence able to provide a foundation for the group to grow over the next three to five years as NWP’s expansion strategy takes off.
To re-cap, both the COVID-19 outbreak and imposition of the movement control order (MCO) had severely impacted the group’s manufacturing capacity.
This is partly due to supply chain disruption and logistic bottlenecks. However, with economic recovery now within sight, NWP targets to ramp up its manufacturing capacity from its current level of around 20% to 80% by end-2022.
“Over the past two years, the management has taken proactive measures to put in place a more agile management team and to improve our manufacturing efficiency by laying down the foundation for growth in the post-COVID world,” revealed Tan.
“With the resolution of the legal tussles, I’m confident that NWP will take on the next phase of growth.”
At the close of yesterday’s (April 4) trading, NWP was down 1.5 sen or 5.66% to 25 sen with 37.86 million shares traded, thus valuing the company at RM132 mil. – April 5, 2022
