KUALA LUMPUR (April 14): TAFI Industries Bhd said its wholly-owned subsidiary is not proceeding with a RM23.64 million contract to construct the health ministry's staff quarters in Labuan.

The subsidiary, TA Furniture & Projects Sdn Bhd, was awarded the contract by Lambaian Delta Sdn Bhd in December last year.

In a bourse filing on Friday (April 14), the group said the parties have mutually agreed to terminate the contract. It did not disclose the reason for the termination.

“The mutual termination of the contract is not expected to have a material impact on the profit and net tangible assets of the company for the financial year ending Dec 31, 2022,” the group said.

Tafi had reported a 92.02% fall in its net profit to RM260,000 for the fourth quarter ended Dec 31, 2022, from RM3.26 million a year earlier, due to lower furniture project sales and export of sales of furniture, along with impairments on trade receivables.

Quarterly revenue, however, was 15.60% higher at RM21.56 million, against RM18.65 million previously, due to income contributions from construction contracts.

Tafi Industries' share price closed 0.5 sen or 0.81% lower at 61.5 sen on Friday, giving the company a market capitalisation of RM231.43 million.