Monday, June 25, 2012
Profit warnings: The Business Times note several listed companies have sounded profit warnings over the past week, as June draws to a close, citing weak business conditions, higher costs and stalled deals. Loyz Energy is the latest to caution that it would be going into the red for FYJun12. Previously named Sim Siang Choon, the co warned that it is expecting higher operating expenses arising from the addition of oil and gas business and a one-time specific provision for doubtful receivables. The provision is for a refundable deposit due from Empire Holdings Ltd. Avi-Tech Electronics too issued a profit warning for its FYJun12, saying it expects to report a "significant loss". Says it will be adversely affected by poor performance of the group's US subsidiaries. This is largely due to higher expenses as a result of the substantial requirements for R&D, and time taken for the devt of new products to replace older models, and limited upside in sales due to the current range of product lines becoming less marketable. Separately, Novo Group warned that it expects to record a loss for FYApr12, bcs of the unpredictable economic situation, growing fears of the sovereign debt crisis spreading in Europe, concerns over a hard landing in China, and a weak US economy. The company expects to announce its annual results today. C&G Environmental Protection Holdings warned that it expects an est loss of HK$11.9m for the June quarter, following the termination of a Build-Operate-Transfer (BOT) agreement. C&G had previously acquired the entire share capital of CUGU Environmental Protection International Ltd (CUGU EPIL), including the BOT agreement on the proposed Waste-to-Energy project in Yingkou, China, that had been signed between CUGU EPIL and the Administration of Environmental Hygiene of Yingkou Economic and Technological Development Zone. C&G also announced that it has commenced negotiation with the Yingkou Administration to seek compensation for the termination of the BOT agreement. United Food warned of a loss in its 2Q, with the expected loss attributed to lower selling prices of the products of the soybean processing division. Other factors impacting the China-based food firm include sustained high prices of raw material, a slowdown in the China economy, and a downturn in the livestock industry.