Avarga Limited, formerly known as UPP Holdings Limited, has reported record net earnings of $29.2 million for Taiga Building Products for the 1QFY2021 ended March, over four times net earnings of $6.6 million over the corresponding period the year before.
Taiga Building Products is one of three core businesses under Avarga. The other two businesses are paper manufacturing and power generation.
Taiga’s higher earnings were primarily attributable to the increased gross margin, which increased almost three times to $90.4 million during the quarter from $30.6 million in the 1QFY2020.
According to Taiga, the higher gross margin was mainly due to rising commodity prices during the quarter.
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Taiga’s revenue for the 1QFY2021 increased 67.3% y-o-y to C$535.9 million ($585.5 million), largely due to increased selling prices for commodity products.
For its paper manufacturing business under UPP Pulp & Paper, margins have recovered to normalised levels following higher adjustments in selling prices since the 4QFY2020.
While volume sales in the 1QFY2021 fell 3.3% y-o-y to 17,852 tonnes, UPP’s EBITDA grew 22.5% y-o-y.
In a separate statement, Avarga announced that it would not be pursuing the proposed listing of UPP Pulp & Paper on the Main Market of Malaysia’s Bursa Securities at this stage.
It adds that it will “continue to explore possible corporate actions and exercises to increase shareholder return”, and that further announcements will be made should there be “material developments”.
In its power generation business, electricity output for Avarga’s power plant in Myanmar grew by 2.6% y-o-y to 97.90 million kWh in the 1QFY2021.
The plant is committed to meet an annual minimum production target of 350 million kWh.
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The ongoing political developments in Myanmar has not impacted the plant’s operations and power production to-date.
For the 1QFY2021, Avarga has declared an interim dividend of 0.42 cent per share for the 1QFY2021 ended March. The group, which aims to pay its dividends quarterly, says its dividend policy aims to achieve a target annual payout of 30% of higher of its net profit.
Avarga’s executive chairman is Tong Kooi Ong, who is also chairman of The Edge Media Group, the parent company of the publisher of The Edge Singapore. Ian Tong, CEO of Avarga, is also an executive director of The Edge Media Group.
Shares in Avarga closed 1.5 cents lower or 4.8% down at 29.5 cents on May 7.
