KUALA LUMPUR (Sept 29): Sern Kou Resources Bud (KL:SERNKOU) said on Tuesday that its will wind down its plywood manufacturing unit due to continuous quarterly losses since the financial year ended June 30, 2024 (FY2024).

In its bourse filing on Tuesday, the wood products manufacturer said there was no reasonable expectation that the financial performance of Sern Kou Plywood Sdn Bhd (SKPW), its 51%-owned subsidiary, will improve in the foreseeable future.

The group estimated an impairment of RM338,000 arising from the review of SKPW's property, plant and equipment (PPE), which may be leased or disposed of.

SKPW's winding down will affect 88 employees — 14 locals and 74 foreigners. A small number of workers will be retained for winding-down functions, while the rest will either be retrenched or transferred within the group. SKPW estimates retrenchment cost will be RM200,000.

The total financial impact on the group from impairment and retrenchment costs is estimated at approximately RM274,000.

Sern Kou said the unit accounted for 2.8% of the group's revenue for FY2026, 5.51% of its net loss and 1.46% of total assets.

For the full year ended June 30, 2026, Sern Kou's net loss stood at RM22.965 million on revenue of RM444.23 million. Its plywood manufacturing unit, meanwhile, lost RM1.27 million on revenue of RM12.43 million. This follows net losses of RM849,000 in FY2024 and RM742,000 in FY2025.    

Sern Kou said the cessation will not impact its other business segments, including furniture manufacturing and sawmill operations.

Sern Kou shares were unchanged at 77.5 sen on Tuesday, giving the group a market capitalisation of RM835.53 million.