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Hong Leong Asia Ltd. - Profit Warning for the Financial Year Ended 31 December 2015
16 February 2016 at 12:01:00 am
The Board of Directors of Hong Leong Asia Ltd. ("HLA" or the "Company", and together with its subsidiaries, the "Group") wishes to announce that the Group expects to report a loss for the financial year ended 31 December ("FY") 2015 subject to the finalization of the unaudited financial statements of the Group for FY 2015.
In the Company's announcement of the unaudited third quarter and nine months financial statement for the period ended 30 September 2015, which was issued on 13 November 2015, the Group had reported a loss attributable to the owners of the Company of $16.7 million for the third quarter ended 30 September 2015. The loss was attributable to the higher loss incurred by the Group's Consumer Products Unit ("Xinfei") and the profits generated by other profitable business units such as the Diesel Engines Unit ("Yuchai") and the Building Materials Unit ("BMU") were not sufficient to offset the loss incurred by Xinfei. The Company had further indicated that the Group expected the performance from its China business units would continue to be weak in the fourth quarter of 2015 and leading into the year 2016, in view of the challenging business environment and the slower growth prospect of the Chinese economy which would have critical influence on the Group with more than 85% of its revenue generated from China.
Based on information currently available to the Group, a loss attributable to the owners of the Company is expected to be reported for FY 2015. The expected loss is attributed mainly to the continuing losses incurred by Xinfei with its revenue for FY 2015 declining by 14.7% due to the weaker home appliance market in China, the general slowdown in China's economy, and over-capacity in the industry which has led to competitors slashing selling prices to gain market share. The profits generated by the other profitable business units of the Group for FY 2015 would not be sufficient to offset these losses.
This profit warning is based on the preliminary review of the Group's performance for FY 2015. Further details of the Group's performance will be disclosed when HLA announces its unaudited financial results for FY 2015 on 26 February 2016.
In the meantime, shareholders and investors are advised to exercise caution when dealing in the shares of the Company.
By Order of the Board
HONG LEONG ASIA LTD.
Yeo Swee Gim, Joanne
Ng Siew Ping, Jaslin
16 February 2016
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