By Doreen Leong

Main Board-bound Evergreen Fibreboard Bhd, a medium density fibreboard (MDF) exporter (MDF), has forecast a tax-exempt dividend of 12.5% or 3.125 sen per 25 sen share each for the financial year ending Dec 31, 2005.

Evergreen executive director Kuo Jen Chiu said on Feb 15 that the dividend policy was "to reward our shareholders so that they will continue to support and share in the future growth of the company".

Kuo said it was the company's "transparent dividend policy" which stipulated that between 20% and 50% of its net profit would be used for dividend payout to shareholders, subject to conditions listed in its prospectus.

Evergreen has also forecast a net profit of RM64.96 million on the back of RM519.42 million revenue for the current financial year.

Under its listing exercise, it is offering 93.66 million new shares at RM1.14 each and also offering for sale 113 million shares.

Of the 93.66 million new shares, 24 million shares will be offered to the public. The initial public offering will close on Feb 25 while balloting is scheduled for March 2.

Of the 113 million shares, it will place out 41.50 million shares while the remaining 71.50 million shares will be placed out to approved Bumiputera investors.

The public issue is expected to raise RM106.77 million, of which RM32 million would be used to repay borrowings, RM9 million for asset acquisition, RM5.2 million for listing expenses and RM60.6 million for working capital.

Kuo said the company would capitalise on the growing demand for MDF, especially in the Asia Pacific, where demand was expected to increase by 51% to 20.1 million cubic metres in 2006 from 13.3 million cubic metres in 2001.

"MDF consumption is expected to surge by another 53% from 2006 to 30.8 million cubic metres in 2008," it said.

Kuo said that Evergreen's main focus was on MDF, which accounted for 82.2% of the group's revenue of RM314.58 million for the ten months to Oct 31, 2004.

"Our core business is MDF in various forms - plain MDF and value-added MDF. We believe we will be the first listed company with 80% focus on MDF," he added.

Evergreen is an integrated producer of engineered wood-based panel products focusing on MDF, which produces particleboards and knocked-down furniture.