ARB sells remaining 51% stake in timber business for RM5.6m
ARB Bhd is disposing of its remaining 51% interest in loss-making timber business Aturmaju (Sabah) Holding Sdn Bhd (AHSB) for RM5.6 million.
KUALA LUMPUR (June 24): ARB Bhd is disposing of its remaining 51% interest in loss-making timber business Aturmaju (Sabah) Holding Sdn Bhd (AHSB) for RM5.6 million.
The group, which has transformed itself into an IT software and platform provider, said it has entered into an agreement with AY Brothers Sdn Bhd for the disposal. ARB had earlier disposed of a 49% stake in AHSB to AY Brothers in August 2019.
The disposal is in line with its strategic plan to transform its business position from the timber sector to the IT sector, ARB said in a filing today.
Primarily involved in the manufacturing of wood products then, AHSB’s operations have been incurring losses over the past few years, which resulted in the cessation of its operations since the second quarter of 2018, the group said.
After the earlier disposal, AY Brothers has since decided to take full control of AHSB’s business operations. Therefore, the proposed disposal of the remaining 51% stake in AHSB gives ARB the opportunity to fully divest its loss-making and non-operating timber business, it said.
ARB executive director Datuk Seri Liew Kok Leong said: “The proposed disposal is a testament of ARB’s strategies to transform and expand on the IT sector instead.
“The divestment will enable us to channel our strength and capabilities on activities that are aligned with our IT business, namely the Enterprise Resource Planning (ERP) and the Internet of Things (IoT), which constitutes the main driver of our earnings contribution.
“We recognise the importance of IT in the challenging society landscape as digital technology is constantly changing the needs and expectations of consumers. Hence, we believe we are on the right track as far as the developments are concerned.”
Liew said this was well demonstrated in the group’s financial performance in 2019, where earnings have increased by almost eight-fold since the cessation of the timber business in 2018.
“We believe that the IT business realignment will further accelerate an integrated technology roadmap and position ARB to respond more quickly to new market opportunities, improving market leadership positions and support our long-term growth strategy,” he said.