ML Global to quit its roof tile business to focus on construction

by **Cals** Sat 09 Jul 2016, 18:31

ML Global to quit its roof tile business to focus on construction

By Billy Toh / theedgemarkets.com | July 8, 2016 : 7:25 PM MYT

KUALA LUMPUR (July 8): ML Global Bhd announced that its wholly-owned subsidiary, Vintage Tiles Industries Sdn Bhd (VTI), will cease its roof tile manufacturing and trading business from July 15, to focus on the construction business.

VTI will also be disposing of all its manufacturing machinery and equipment under its manufacturing division at a later stage, according to ML Global's filing today.

The decision is made because VTI's business operates in a very competitive environment, and in an industry that is experiencing declining revenue and margins.

As at Dec 31, 2015, VTI's manufacturing division has incurred an accumulated loss of RM17.2 million, while its unaudited quarterly results ended March 31, 2016 showed a loss of RM208,000 under the division.

Meanwhile, VTI has inked a tenancy agreement with its business collaboration partner, Terreal (M) Sdn Bhd, for the rental of its factory in Nilai, Negeri Sembilan, for nine months, with an option to extend for another six months, at a monthly rental of RM30,000.

"The tenancy agreement is expected to generate positive cash inflow to the group," said ML Global.

The group added the business cessation is expected to reduce losses and improve the overall cash flow of the group with the expected rental income.

ML Global's share price rose 2 sen or 3.4% to settle at 61 sen at market close, giving it a market capitalisation of RM54.7 million.