KUALA LUMPUR (Feb 27): Muda Holdings Bhd shares surged 23.08% in active trade this morning after its net profit doubled year-on-year to RM35.97 million from RM17.91 million because of better selling prices and higher demand for paper mills and paper packaging products.

At 9.05am, Muda rose 30 sen to RM1.60 with 1.28 million shares done.

Revenue for the fourth quarter ended Dec 31, 2017 (4QFY17) rose 25.23% to RM451.95 million from RM360.89 million a year ago, attributable to higher revenue from the manufacturing division, it said in a filing with Bursa Malaysia today.

Earnings per share stood at 11.79 sen compared with 5.87 sen in 4QFY16.

For the full financial year (FY17), net profit surged 212.47% to RM58.77 million or 19.26 sen per share from RM18.81 million or 6.17 sen per share due to recognition of compensation from the insurer net of expenses of RM23.3 million in the accounts versus net charge of RM11.8 million in FY16.

However, gross margin for FY17 was lower than the preceding year as a result of higher waste paper price for paper milling and higher industrial paper price for paper packaging.

Revenue for FY17 grew 18.94% to RM1.45 billion against RM1.22 billion last year on the back of demand increase for paper packaging products and rise in selling price which offset higher raw material costs.

Looking forward, Muda said it expects positive domestic and global economies to drive the consumption of industrial paper and paper packaging products that would translate into higher demand for its products.