Tat Seng Packaging Group will not be going ahead with the proposed spin-off of its China-based subsidiary for a separate listing.
“The company is of the opinion that the current global economic environment, taking into consideration the impact of the global Covid-19 pandemic outbreak, as well as the volatile global equity markets are not conducive for the proposed spin-off and listing,” says the corrugated paper manufacturer on Aug 12.
See also: Hanwell appoints Sam Goi as non-executive chairman
The proposed spin-off was first mooted in February this year.
On the same day, the company announced that earnings for 1HFY2021 was up 37% y-o-y to $14 million, on the back of a 36.4% increase in revenue to $176 million, thanks to higher volume sold and higher selling prices.
The company plans to pay an interim dividend of 1.5 cents per share, up from one cent paid this time last year.
Tat Seng shares closed on Aug 13 at 82 cents, up 4.49% for the day and up 33.61% year to date.
Separately, Tat Seng’s controlling shareholder, another listed company Hanwell Holdings, reported revenue of $257.8 million, up 19.5% y-o-y, thanks partly to contributions from Tat Seng. Hanwell owns around two-thirds of Tat Seng.
Hanwell, which sells consumer staples such as rich, foodstuffs and tissue paper, saw a slight drop in this business too because of the high base effect over last year’s spike in demand because of consumers stocking up amid the pandemic.
Coupled with unfavourable foreign exchange movements, earnings dropped by 10% to $8.9 million.
Hanwell plans to pay an interim dividend of 0.25 cent. It didn’t pay any this time last year.
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In April this year, Hanwell had a change in board control after Sam Goi Seng Hui garnered enough support to vote out previous executive director Coco Tang Cheuk Chee.
Hanwell shares closed Aug 13 at 43 cents, unchanged for the day but up 46.55% year to date.
Photo credit: Tat Seng's FY2020 annual report