KUALA LUMPUR (Feb 21): Industrial storage tank maker CN Asia Corp Bhd (KL:CNASIA) has proposed a share capital reduction to pare its accumulated losses.

The capital reduction exercise will involve reducing RM35 million of its RM75.98 million share capital, according to the group’s bourse filing on Friday.

The exercise is expected to slash the group’s accumulated losses of RM43.41 million as at September 2024 to RM8.66 million.

“The proposed share capital reduction will enable the group to rationalise its financial position by reducing the accumulated losses to more appropriately reflect the value of the underlying assets and the financial position of the group,” CN Asia said.

“In addition, the reduction of accumulated losses is expected to enhance the credibility of the group with bankers, customers, suppliers, investors and other stakeholders,” it added.

The share capital reduction is expected to be completed by the second quarter of 2025.

TA Securities Holdings Bhd has been appointed as the principal adviser for the exercise.

CN Asia manufactures storage tanks for the petroleum, logistics, power and general process industries, as well as road tankers and pressure vessels.

For the second quarter ended Sept 30, 2024 (2QFY2025), CN Asia posted a 52.4% decline in net profit to RM129,000 from RM271,000 in the same period a year earlier, while revenue rose 13.5% to RM5.42 million versus RM4.77 million previously.

The lower earnings were due to a rise in raw material and labour costs.

For the six months ended Sept 30, 2024 (6MFY2025), the group logged a net loss of RM160,000 versus a net profit of RM512,000 in 6MFY2024, as revenue rose 9.2% to RM8.58 million from RM7.86 million previously.

Shares in CN Asia ended unchanged at six sen, valuing the group at RM14.3 million.