KUALA LUMPUR (July 4): Loss-making timber and timber products maker NWP Holdings Bhd is looking for opportunities in the construction sector for additional sources of income that may return the company to profitability.
Towards that purpose, NWP said it has inked two memorandums of understanding (MoUs) today; the first may result in it being appointed the main contractor of a proposed development comprising 160 serviced suites in Melaka, while the second is to form a strategic partnership with another company for future construction projects.
According to its bourse filing, the first MoU was signed with property developer Listari Marina Sdn Bhd (LMSB), under which LMSB is proposing to appoint NWP as the main contractor of its project in Pekan Klebang, Melaka Tengah, subject to the finalisation of terms and the execution of a definitive agreement between the parties at a later date.
NWP is required to seek the necessary funding to carry out the works for the project, which will be on a leasehold plot. LMSB has inked a joint venture agreement with Cash Support Sdn Bhd, the land owner, to develop the plot.
The second MoU that NWP inked is a strategic partner MoU with China-based mechanical and engineering installation company SCEGC Installation Group Company Ltd, under which they will jointly undertake any construction project obtained by either party on a joint venture basis.
"Any construction project obtained by the SCEGC and NWP will be conducted through a joint venture which shall be limited strictly to the construction of development of property," it said.
NWP has been posting losses since 2006. For the first half ended Feb 29, 2016, the group reported a net loss of RM1.05 million, compared with a net profit of RM318,000 in the same period last year, as revenue declined near 27% to RM6.5 million from RM8.87 million previously.
As at Feb 28 this year, the group's total accumulated losses stood at RM58.46 million.
Earlier in April, Cashflow Budget Sdn Bhd, in which NWP chief executive officer Wong See Ming has an indirect interest, ceased to be a substantial shareholder of NWP after it disposed of 24.2 million shares in the company.
At 2.56pm, NWP shed 0.5 sen to 34 sen, for a market capitalisation of RM108.8 million. The counter has declined 12.82% or five sen since June 7, when it was trading at 39 sen. — theedgemarkets.com