(For consistency purposes, the abbreviations and definitions used throughout this announcement shall have the same meanings as those previously defined in the Company's announcement dated 29 September 2026 in relation to the cessation of operations of Sern Kou Plywood Sdn. Bhd., a 51%-owned subsidiary of the Company.)
We refer to the announcement dated 29 September 2026 in relation to the cessation of operations of Sern Kou Plywood Sdn. Bhd. ("SKPW"), a 51%-owned subsidiary of the Company ("the Announcement").
The Board of Directors of the Company wishes to inform the following additional information in relation to the Announcement:-
The estimated impairment loss on PPE of RM338,000 was determined based on the unaudited carrying amount of the PPE as at 30 June 2026, taking into account the expected impairment of certain factory renovation and electrical installation costs and the net present value ("NPV") of the assumed rental cash flows from the remaining PPE. The NPV was derived based on possible leasing assumptions and after taking into consideration the applicable discounting factor rate.
Although SKPW's loss represented approximately 5.51% of the Group's unaudited LAT for FYE 2026, SKPW has incurred continuous losses since FYE 2024. Its plywood products, which are mainly manufactured from waste and recycled materials for the construction industry, have been adversely affected by the slowdown in the construction sector, resulting in increased competition, pricing pressure, higher operating costs and low factory utilisation. Accordingly, the Members of SKPW, including the minority shareholders, concluded that it is no longer commercially viable to continue the plywood manufacturing operations in their present form.
As mentioned above, SKPW's plywood products are mainly manufactured from waste and recycle materials and for construction purposes. Accordingly, the Cessation is not expected to have any material operational impact on the Group's furniture and sawmill operations.
Save for the above clarification, all other information contained in the announcement dated 29 September 2026 remains unchanged.
This announcement is dated 1 October 2026.