SEE:Avarga's name change reflects growing ambition while it generates earnings growth
FY2020 revenue for Taiga stood at $1.6 billion, compared to the $1.3 billion posted in FY2019. Taiga’s margins were boosted by significantly higher commodity prices, particularly for lumber. In addition, Taiga gained from the strong housing markets in the Canada and the US, which was caused by record low interest rates, and the trend towards suburban homes due to the remote working arrangements brought about by the Covid-19 pandemic. In a separate filing on Feb 26, Taiga announced a special dividend payment of 27.64 Canadian cents (29.03 cents) per share to be paid on March 19. 2HFY2020 gross profit more than doubled to $165.1 million from $77.9 million a year ago, while FY2020 gross profit increased 65% y-o-y to $247.7 million.
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During the year, Avarga’s paper manufacturing division business in Malaysia was affected by the Movement Control Order (MCO), which resulted in lower production and higher costs. The group says it is “mindful” of the risks of developments related to Covid-19. China’s environmental policies on solid waste are also expected to influence the price of waste paper and paper products in the region. That said, the growing shift in e-commerce is positive for demand, says the group. Operations at Avarga’s power plant business in Myanmar have continued as normal and have not been affected by the coup that took place in the country on Feb 1. During the pandemic, production of electricity was not affected, given the need for supply in the country. The group says earnings for the power plant are largely backed by a 30-year power purchase agreement, expiring in February 2044, with the Electric Power Generation Enterprise (EPGE), under Myanmar's Ministry of Electricity and Energy. 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 3 cents higher or 9.0% up at 36.5 cents on Feb 26.