TORONTO, May 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 March 31, 2019, reporting a net loss of US$0.35 million for the third quarter. All figures quoted are in U.S. dollars.
Q3 FY2019 Highlights
- Strong revenues from its new restaurant operations totaling $910,000 for the quarter
- Total revenues from continuing operations of $1.04 million for the quarter and $1.7 million for the year-to-date (Q3 FY2018: $0.19 million; $0.55 million for the nine months of FY2018)
- Dividend received from an associate for the nine months of FY2019 totaling $1.25 million
- A loss attributable to shareholders of the Company from continuing operations amounted to $0.27 million for Q3 FY2019 and $2.3 million for the year-to-date (Q3 FY2018: a period loss of $0.22 million and $0.76 million for the nine months of FY2018)
- A loss before tax of $0.35 million for the quarter and loss before tax of $2.38 million for the year-to-date from continuing operations (Q3 FY2018: loss of $0.22 million; a loss of $0.75 million for the nine months of FY2018)
- General and administrative expenses of $1.14 million for the quarter and $1.94 million for the year-to-date (Q3 FY2018: $0.21 million; $0.69 million for the nine months of FY2018)
- Following the Company's previously announced debt settlements, a substantial decrease in finance costs to nil in Q3 FY2019 and US$18,000 for the year-to-date as compared with $119,000 and $359,000 in Q3 and the nine months of FY2018 respectively
"Despite this quarter's loss, we are pleased with revenues and prospects within our new restaurant focused operations where we benefit from our affiliation with Sunwah Group, which is proving to be a significant tactical advantage for us," said Michael Choi, CEO of Sunwah International. "This strategic repositioning is one of several initiatives we've undertaken recently to expand and diversify our operations in order to achieve stable business growth over the long-term."
Sunwah International recently adopted a new business plan and strategic direction, which includes an emphasis on the food and beverage industry in line with the strengths of its parent company, Sunwah Group, a major Asian conglomerate and one of the biggest players in this space in Hong Kong.
In accordance with the Company's refocused operations, Sunwah International now presents its results according to four main segments as described below.
- Financial Services Division – This division comprises the results from Sunwah International's remaining (27.90%) interest in Sunwah Kingsway Capital Holdings Limited (SWK), its former principal subsidiary and now the Company's main investment asset. Q3 FY2019 highlights:
- A loss on the deemed partial disposal of an associate (SWK) amounting to $117,000 in relation to a scrip dividend arrangement wherein the Company elected to receive a cash dividend, which resulted in the further dilution of its interest in SWK from 28.36% to 27.90%
- A share of profit of $0.61 million for the quarter and share of loss of $0.82 million for the nine months of FY2019, mainly the result of a trading gain or loss recorded by SWK amid fluctuating stock markets in Hong Kong
- Restaurant Operations – This division encompasses Sunwah International's activities in restaurants in accordance with its new business focus following the recent acquisition of HFL Limited, an Asian food and beverage company operating premium Chinese seafood restaurants in Hong Kong. Q3 FY2019 highlights:
- Revenues for the quarter of $0.91 million and $1.24 million for the year-to-date
- Cost of sales of $0.26 million for the quarter and $0.36 million for the year-to-date
- Impairment of goodwill of $0.41 million for the quarter and year-to-data
- A loss of $0.56 million, primarily the result of higher staff costs as the Company undergoes a transition period following a recent minimum wage increase in Hong Kong and the impairment of goodwill
- Technology Products and Services – This division covers the sale of software products and the provision of related maintenance services to the financial services market in Hong Kong. Q3 FY2019 highlights:
- Revenue from sales and maintenance services for the quarter of $125,000 and $442,000 for the year-to-date, down from $181,000 and $525,000 in last year's respective periods. The year-over-year decrease is the result of particularly high demand last year for a compliance program launched during that year
- A small loss of $33,000 for the quarter and $39,000 for the nine months of FY2019 against gains of $15,000 and $50,000 in last year's comparable periods
- Cost of sales of $74,000 for the quarter and $225,000 for the year-to-date (Q3 FY2018: $81,000 and $241,000 for the nine months of FY2018)
- Strategic Investments and other activities – This division includes strategic investments, proprietary investments and other activities of the Group. Q3 FY2019 highlights:
- No significant fair value change on investment for the quarter. A loss of $0.3 million was recorded for the nine months of FY2019 as a result of a sizeable loss incurred in Q2 (nine months of FY2018: loss of $0.05 million)
- Net loss of $0.25 million for the quarter and $0.93 million for the year-to-date (Q3 FY2018: net loss of $0.23 million; nine months of FY2018: net loss of $0.80 million)
For more information on Sunwah International's third 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 third quarter ended March 31, 2019 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@example.com.