TIMBER-BASED NWP Holdings Bhd has seen net loss for its 4Q FY2023 ended Feb 28, 2023 narrowed significantly to RM95,000 from RM9.1 mil in the same quarter a year ago. The improvement can be attributed to cost savings from the termination of a lease and lower financing costs.
During the quarter under review, the group has also recorded lower expenses as compared to 4Q FY2/2022 as a result of cost-cutting measures such as lowering headcount and moving office premises to lower rentals.
Notwithstanding this, revenue for NWP’s 4Q FY2/2023 was down by 41% to RM480.000 from RM820,000 in the corresponding quarter a year ago due to lower demand for timber lower overseas timber sales due to lesser demand.
“Our cost-cutting initiatives have successfully borne results. The management has taken proactive measures to streamline our business and focus our efforts on managing our costs as the mould and timber businesses have been struggling for several years,” commented NWP’s executive director Tan Jyy Yeen.
“While these challenges remain going forward, we are confident that a leaner workforce and a more efficient operation within the group will help us to turn around in the near term.”
For the full FY2/2023, NWP reported a net loss of RM5.25 mil which is 69.7% lower than the net loss of RM17.35 mil incurred in FY2/2022.
For FY2/2023, NWP’s revenue was 18.6% lower at RM2.63 mil from RM3.23 mil recorded for the corresponding period a year ago given there is only one operating subsidiary in its timber business.
Nevertheless, NWP is poised for a turnaround in the upcoming financial year with the group diversifying into the sand dredging business to generate additional revenue and earnings.
“We are looking forward to FY2/2024 as successful cost-cutting initiatives in FY2/2023 and our diversification into the sand dredging business put us in a strong position to turn profitable,” projected Tan.
“In June last year, NWP entered into a joint venture agreement with OneOne Auro Marine Sdn Bhd to undertake contracting work for dredging, transporting, and loading marine sand from the concession area for export and local reclamation sites.”
Earlier this month, NWP secured a two-year contract worth RM36 mil for a marine, mining, and transportation project in Melaka which Tan believes will significantly contribute to the growth and expansion of the group’s revenue streams, potentially bringing NWP back into profitability by this financial year.
Located in the Malacca Sea area, the project will involve the deployment of a fleet of engineering vessels for mining tasks. These vessels will extract marine sand from the designated sea area and transport it to the specified location directed by China-owned Gezhouba Engineering (M) Sdn Bhd where it will be discharged or unloaded from the barge.
At the close of today’s mid-day trading break, NWP was up 0.5 sen or 2.5% to 20.5 sen with 3.45 million shares traded, thus valuing the company at RM119 mil. – April 25, 2023
