NWP’s net loss narrowed in the 4QFY2023 mainly due to savings from the termination of a lease coupled with lower financing costs for the lease and its cost-cutting measures
The management has taken proactive measures to streamline its mould and timber business and focusing on controlling headcount costs to curtail operating losses
The Group expects a better outlook for FY2024 with the diversification into the sand dredging business that will allow NWP to generate additional revenue and earnings
NWP has secured a massive two-year contract valued at RM36 million for a marine sand mining and transportation project in Melaka.
KUALA LUMPUR, 25th APRIL 2023 – NWP Holdings Bhd (KLSE: 5025) ("NWP" or "Company" or "Group") reported a significant reduction in net loss for the fourth quarter of its financial year ended 28 February 2023 (“4QFY2023”), narrowed to RM95,000 from a net loss of RM9.1 million 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, the Group has also recorded lower expenses as compared to 4QFY2022 as a result of cost-cutting measures such as lowering headcount and moving office premises to lower rentals.
Meanwhile, revenue for 4QFY2023 was down by 41% to RM0.48 million compared to RM0.82 million for the corresponding quarter a year ago. The lower revenue recorded was mainly due to lower overseas timber sales due to lower demand.
NWP Holdings Berhad Executive Director Ms Tan Jyy Yeen, said: “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. 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 year FY2023, NWP reported a net loss of RM5.25 million, about 69.7% lower than the net loss of RM17.35 million recorded in FY2022.
For FY2023, NWP’s revenue was 18.6% lower at RM2.63 million as compared to RM3.23 million recorded for the corresponding period a year ago. The Group’s revenue was lower as there is only one operating subsidiary in the 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.
Ms. Tan added, “We are looking forward to FY2024 as successful cost-cutting initiatives in FY2023, and our diversification into the sand dredging business put us in a strong position to turn profitable. In June last year, we 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 million for a marine, mining, and transportation project in Melaka. Ms. Tan believes this project will significantly contribute to the growth and expansion of the Group's revenue streams, potentially bringing NWP back into profitability by this financial year.
The project, located in the Malacca Sea Area, 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 Gezhouba Engineering, where it will be discharged or unloaded from the barge.
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