KUALA LUMPUR (May 22): Kanger International Bhd has revealed today reasons why it axed plans to jointly develop bamboo products and furniture with Bangladesh-based company, A K Khan Plywood Co Ltd.

"The board of directors of Kanger wishes to announce that the memorandum of understanding (MoU) was terminated as both parties, after taking into consideration factors including profit sharing, logistical issues and mode of collaborations, decided not to proceed with the MoU," read its bourse filing today.

This was in relation to Kanger's announcement on May 18, which stated both parties' mutual decision in terminating the agreement signed in November 2016.

The MoU, which was for the setup of a joint venture company in the business, was extended several times over the past year and a half, before both parties decided to abort the preliminary agreement.

The bamboo flooring manufacturer was initially banking on the joint venture to generate another source of stable recurring revenue.

However, it explained today that both parties would still explore other business opportunities on a non-committal basis, which include business referrals and technical collaborations.

For its financial year ended Dec 31, 2017, Kanger recorded a net profit of RM7.3 million, compared with RM5.48 million in FY16, in tandem with its revenue growth.

Revenue grew 6.85% year-on-year to RM73.5 million from RM68.79 million, mainly thanks to the pick-up in domestic sales in China which resulted from intensified marketing efforts.

Shares in Kanger closed half a sen or 5% lower at 9.5 sen today, giving it a market capitalisation of RM76.4 million.