KUALA LUMPUR (June 15): Tien Wah Press Holdings Bhd announced today that its Australian unit will be ceasing its remaining printing business, which it expects to impact its earnings for the current financial year ending Dec 31, 2017 (FY17).

As a result of the one-off redundancy cost and impairment loss on plant and machineries to be incurred, there will be a reduction of RM15.75 million to consolidated earnings, and a decline of 11 sen earnings per share and net assets per share, said Tien Wah in a statement to Bursa Malaysia.

The cessation of the Australian unit Anzpac Services (Australia) Pty Ltd's printing business is part of the group's restructuring of its production footprint to improve strategic positioning and reduce operating costs in the longer term, it said.

Anzpac, which is principally in the business of printing packaging and paper board conversion, is not a major subsidiary of the group, it noted.

The company is a wholly-owned subsidiary of Max Ease International Ltd (MEIL), a Hong Kong-incorporated company that is 51%-owned by Tien Wah. The remaining 49% in MEIL is held by New Toyo International Holding Ltd, the ultimate holding company of Tien Wah Press.

According to Tien Wah Press, the proposed cessation will also involve the disposal of assets — except Anzpac's freehold land and office/factory building — computer equipment and furniture fittings, as well as the settlement of the Anzpac’s liabilities. A total of 69 employees will be made redundant following the exercise.

The land and building which will be retained will remain with Anzpac for the purpose of generating future rental income, it said, though Anzpac may dispose of the assets at a later date if offered the right price.

“The land and building have not been revalued as the group accounting policy is to state at cost less accumulated depreciation. However, if a revaluation on the land and building is performed, it will result in a revaluation surplus of A$5.74 million (RM19.4 million),” Tien Wah said.

The group has, since September 2014, initiated the transfer of production volume of Gravure Printing from Anzpac to its existing operation in Vietnam, Alliance Print Technologies Co Ltd (APT), it said.

“After the transfer of the production volume to APT, and despite Anzpac management’s efforts to reorganise Anzpac’s remaining lithography printing business in its non-tobacco customers, the board is of the view that Anzpac’s business is no longer viable or sustainable,” it said.

It expects the proposed business cessation to be completed by the third quarter ending Sept 30.

Tien Wah shares slid 1% or two sen to RM1.94, valuing the group at RM280.8 million. Year to date, the stock has gained 10.2%.