TORONTO, Nov. 14, 2019 /CNW/ - Sunwah International Limited,TSX: SWH ("Sunwah International" or the "Company"), a Hong Kong based investment firm and member of major Asian conglomerate, Sunwah Group, today announced its financial results for the first quarter ended September 30, 2019, reporting a net loss of US$0.78 million for the period. All figures quoted are in U.S. dollars.
Q1 FY2020 Highlights:
- Total revenues, mainly from the Company's new Restaurant Operations, of $0.83 million for the quarter
- A loss attributable to shareholders of the Company from continuing operations amounting to $0.69 million for Q1 FY2020 compared with a loss $0.48 million in last year's comparable period
- A loss before tax from continuing operations of $0.78 million for the period against a loss before tax of $0.48 million last year
- Cost of sales for Sunwah International's new Restaurant Operations of $0.23 million
- An increase in selling, general and administrative expenses to $1.03 million from $0.19 million in Q1 FY2019. The increase was the result of expenses related to its new restaurant business as well as staff secondment and management fee expenses payable to Sunwah Kingsway Capital Limited (SWK), the Company's former principal subsidiary and now main investment interest, in its continued capacity as management services provider to Sunwah International.
- A small decrease in finance costs from $18,000 in Q1 FY2019 to $17,000 in the current period
"The deteriorated operating conditions in Hong Kong and China during the quarter obviously had a negative impact on our Q1 results, yet despite this economic uncertainty we are confident in our ability to cope with challenging markets and return to growth afterwards; something we've certainly before proven we can do in the course of our 30-year history," said Michael Choi, CEO of Sunwah International. "The Company continues to focus on revenue diversification to weather these uncertain markets, and in particular we are pleased with strong revenues and prospects from our new restaurant operations where we benefit from the highly reputable brand and extensive connections of our majority shareholder, Sunwah Group, one of the biggest players in this business in Hong Kong."
Sunwah International's results are strongly influenced by Asia's economic environment and in particular the financial markets of China and Hong Kong by way of its significant operational presence in these regions. Given China's recent downturn in GDP – the country experienced some of its slowest growth in over 27 years in recent months – as well as increasingly adverse investor sentiment stemming from the U.S.-China trade wars and social unrest in Hong Kong, markets were inevitably affected, which in turn had a negative impact on the Company's first quarter results.
In accordance with the Company's refocused operations, Sunwah International now presents its results according to the following main segments:
- Financial Services Division – This division comprises the results from the Company's remaining (27.90%) interest in Sunwah Kingsway Capital Holdings Limited, its former principal subsidiary and now main investment interest (now accounted for as an associate under the equity method of accounting).
Q1 FY2020 highlights:
- A share of losses of $0.35 million against a share of losses of $0.38 million last year, representing the share of results of the 28.36% (now 27.90%) equity interest in SWK recorded in Q1 FY2020 and FY2019 respectively
- SWK's first quarter losses in FY2020 and FY2019 were mainly the result of a trading loss on financial assets at fair value through profit or loss and a decrease in commission and fee income
- Revenues for the quarter of $0.83 million
- Cost of sales of $0.23 million, representing the cost of inventories sold
- General, selling and administration expenses of $0.58 million, which includes staff costs of approximately $0.4 million (wages and allowances, pension costs, employee benefits etc.), in line with a recent increase in salaries in Hong Kong alongside the implementation of the Minimum Wage Ordinance
- Depreciation and amortization amounted to $0.20 million while property related management expenses totaled $41,000.
- A loss of $0.19 million was recorded after an interest expense on the lease liability of $16,000
- A small trading gain of $1,000 in Q1 of FY2020 and FY2019 respectively
- Interest income of $13,000 was recorded in the current quarter against $9,000 in Q1 FY2019.
- An increase in selling, general and administrative expenses from $0.19 million in Q1 FY2019 to $0.26 million in the current period, mainly the result of staff secondment and management fee expenses payable to SWK
- A substantial decrease in finance costs from US$18,000 in Q1 of FY2019 to US$1,000 in Q1 of FY2020 mainly due to the debts settlement completion in which the Group repaid the entire loan balance borrowed from a related party and redeemed the debentures in Q1 of FY2019. The interest expense in Q1 of FY2020 represents the interest on the six-month short term loan obtained in September 2019.
- Net loss of $0.24 million in Q1 FY2020, against a net loss of $0.19 million in Q1 FY2019
- A small profit of $13,000 was recorded in Q1 FY2019 (Q1 FY2020: N/A).
For more information on Sunwah International's Q1 FY2020 operating results, please see the Management's Discussion and Analysis (MD&A) and the unaudited interim consolidated financial statements, which are filed on SEDAR and also available on the Company's website at www.sunwahinternational.com.
About Sunwah International Limited
Sunwah International Limited is an investment firm and a member of Sunwah Group, one of Hong Kong's most prominent multi-national conglomerates. The Company's current primary investment interest, Hong Kong based Sunwah Kingsway Capital Holdings Limited, is listed on the Stock Exchange of Hong Kong under the stock code 00188. Sunwah Kingsway is licensed to provide a range of financial solutions in Hong Kong and abroad that include award-winning brokerage services and innovative corporate finance offerings.
Leveraging the expansive relationship network and strategic strengths of Sunwah Group, the company is now also focused on the food and beverage industry following the recent acquisition of HFL Limited, which operates a premium Chinese seafood restaurant in Hong Kong.
This press release announcing the financial results for Sunwah International's quarter ended September 30th, 2019 should be read in conjunction with the unaudited interim consolidated financial statements and management's discussion and analysis of Sunwah International Limited (the "Company") and its subsidiaries.
This press release contains certain statements that reflect management's expectations and objectives for the Company's future performance, opportunities and growth, which statements constitute "forward‑looking information" and "forward-looking statements" (collectively "forward-looking information") under applicable securities laws. Such statements, other than statements of historical fact, are predictive in nature or depend on future events or conditions. Forward-looking information involves estimates, assumptions, judgments and uncertainties. These statements may be identified by the use of forward‑looking terminology such as "may", "will", "should", "anticipate", "expect", "believe", "predict", "estimate", "continue", "intend", "plan" and variations of these words or other similar expressions. Specifically, this press release includes forward-looking information in respect of Sunwah International's 2020 objectives, including its focus on a variety of industries as an investment holding company and its initiative to expand and diversify, and its strategies to achieve those objectives. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.
Except as required by applicable law, management and the board of directors of the Company (the "Board of Directors") undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE Sunwah International Limited
For further information: Kristen Humphrey, Sunwah International Limited, (416) 888-2323, [email protected]