TORONTO, Feb. 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 period ended December 31, 2018, reporting a net loss of US$1.56 million for the second quarter. The quarter's deficit reflects a fair value loss on financial assets and the share of results under the equity method of its primary investment in Sunwah Kingsway Capital Holdings Limited ("SWK") as the Company transitions to a new organizational structure following the recent acquisition of HFL Limited, a Hong Kong based food and beverage company.
The Company's acquisition of HFL Limited officially marks Sunwah International's foray into the food and beverage industry, a move that leverages the strategic strengths of its primary shareholder, Sunwah Group, one of the biggest players in this space in Hong Kong. The Company will continue to focus on a variety of other industries in its capacity as an investment holding company, in particular the financial services sector.
"In order to elevate our business and bring value to shareholders in the long-term, Sunwah International is undertaking a variety of initiatives to expand and diversify our operations, which includes an emphasis on the food and beverage industry," said Michael Choi, CEO of Sunwah International. "In particular, our new structure encompasses opportunities in food distribution and restaurants, an area we are very well acquainted with in Hong Kong and where we can leverage the knowledge and relationship network of Sunwah Group, which is a huge strategic advantage for us."
Q2 FY2019 Results
In accordance with the Company's new business plan and SWK's deconsolidation for accounting purposes from Sunwah International in FY2018, the Group now presents its results according to four divisions: (1) Financial Services, comprising results from its remaining equity interest in SWK; (2) Restaurant Operations, being the results from HFL Limited; (3) Technology Products and Services, which includes the sale of software products and the provision of related maintenance services conducted by non-wholly owned subsidiaries; and (4) "Strategic investments and other activities".
Financial highlights for continuing operations (in USD) include:
- A loss attributable to shareholders of the Company of $1.56 million for Q2 FY2019 and $2.03 million for the year-to-date (versus a loss of $0.28 million and 0.54 million in the comparable periods of Fiscal 2018)
- A loss before tax of $1.56 million for the quarter and $2.03 million for the year-to-date (Q2 FY2018: loss of $0.28 million; a loss of $0.53 million for the six months of FY2018)
- Total revenues of $0.48 million for the quarter and $0.67 million for the year-to-date (Q2 FY2018: $0.16 million; $0.36 million for the six months of FY2018)
- Cost of sales from technology products and services of $75,000 for the quarter and $0.15 million for the year-to-date (Q2 FY2018: $71,000; $0.16 million for the six months of FY2018)
- Cost of sales from restaurant operations of $96,000 for the quarter and year-to-date (Q2 FY2018: N/A)
- General and administrative expenses of $0.53 million for the quarter and $0.81 million for the year-to-date (Q2 FY2018: $0.25 million; $0.48 million for the half-year of FY2018)
- Following the Company's previously announced debt settlements, a substantial decrease in finance costs to nil in Q2 FY2019 and US$18,000 for the year-to-date as compared with $135,000 and $240,000 in Q2 and the first half of FY2018 respectively
- Financial Services Division (share of results of SWK under equity method): Loss of $1.05 million for the quarter and $1.34 million for the six months of FY2019 mainly reflects the Group's share of results from SWK (FY2018: N/A)
- Restaurant Operations: Revenues of $334,000 and a profit of $1,000 for the quarter and year-to-date. No comparable information for FY2018
- Technology Services Division: Net loss of $19,000 in Q2 and a loss of $6,000 for the year-to-date, which compares with a net loss of $6,000 in Q2 FY2018 and a profit for the six months of FY2018 of $36,000. The higher revenue in FY2018 was the result of particularly high demand for a compliance program launched during that period.
- Strategic investments and other activities: Net loss of $0.50 million and $0.69 million of the quarter and year-to-date (Q2 FY2018: net loss of $0.28 million; six months of FY2018: net loss of $0.56 million). The notable increase in year-over-year loss is the result of a loss in fair value of financial assets and higher general and administrative expenses during the current periods.
For more information on Sunwah International's second quarter 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 second quarter ended December 31, 2018 should be read in conjunction with the unaudited 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 our 2019 objectives, including our focus on a variety of industries as an investment holding company and our initiative to expand and diversify, and our 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]