KUALA LUMPUR (April 18): More than a year after it diversified into the sand dredging business, timber products manufacturer Auro Holdings Bhd (formerly known as NWP Holdings Bhd) is proposing to venture into the food and beverage (F&B) business.
The proposed diversification is aimed at expanding its revenue stream and reducing its reliance on the wood-based and sand mining industries, said the loss-making company in a bourse filing on Thursday.
The company is already in the F&B sector after obtaining rights from HK Heycha Ltd to operate the Chinese tea chain 'HEYTEA' in Malaysia with the first store opened in December last year.
Auro expects the F&B business to contribute over 25% of its net profit in the future with the opening of additional 'HEYTEA' stores in Malaysia.
The company said the proposed diversification, which is subjected to shareholders' approval, is expected to be completed in the second quarter of this year.
Auro has been in the red for several years, but has managed to trim its net loss to RM5.65 million for the financial year ended Feb 28, 2022 (FY2023) from RM17.38 million in FY2022.
Net loss for the nine months ended Nov 30, 2023 also narrowed to RM1.05 million from RM5.16 million a year earlier, due to lower loss from its timber business, impairment reversals on receivables and inventories coupled with lower overhead expenses. Revenue doubled to RM4.3 million from RM2.15 million on the back of contribution from its new sand business.
As at end-November last year, the group had cash of RM850,000. Meanwhile, it had trade payables of RM564,000 and other payables amounting to RM3.91 million as well as RM500,000 due to its directors
Shares in Auro closed unchanged at 15.5 sen, giving the company a market capitalisation of RM90 million.