TORONTO, Sept. 23, 2013 /CNW/ - Sunwah International Limited,TSX: SWH (the "Company"), an Asian based financial services firm, today announced its financial results for the year ended June 30, 2013. All figures quoted are in U.S. dollars unless otherwise specified.
For the Company's current financial year, Sunwah International and its subsidiaries (collectively "the Group") recorded a net loss of $3.5 million, which compares with a loss of $16.6 million in FY2012. While denoting a substantial improvement over last year's results in which the Company reported significant, unrealized mark-to-market decreases in its investment portfolio, the loss for Fiscal 2013 is attributable to ongoing weak capital markets activity in Hong Kong and worldwide impacting the Group's service based business.
Total revenues rose considerably to $13.1 million from $1.4 million reflecting modest gains in the value of the Group's proprietary investment portfolio of $1.6 million, which compares with a loss of $12.1 million in Fiscal 2012. This pronounced increase reflects the moderately improved performance of the Group's Hong Kong equity portfolio during the year.
Commission and fee income decreased from $10.5 million in FY2012 to $8.6 million as a result of a decline in advisory fee income for initial public offerings (IPO) and related preparatory work. The poor IPO market also resulted in a decrease in IPO financing interest, while lower trading volumes in Hong Kong significantly reduced Sunwah International's income from margin financing. This contributed to a decline in interest and dividend income from $3.0 million in FY2012 to $1.7 million in the current year. General and administrative expenses totaled $17 million for the year compared with $22.5 million last year as a result of a focus on managing expenditures and lower staff/commission expenses in line with the reduced capital markets activity.
Moving forward, Sunwah International will continue to operate with an emphasis on streamlining costs and focusing resources where it excels. Further, Management is in the process of fine-tuning areas of its business model with a particular focus on its international advisory services group and unique expertise in bringing Asian strategic investors together with quality international opportunities/assets. Demonstrating this commitment, during the year the Company restructured and strengthened its advisory services teams in both Canada and Hong Kong (at minimal cost to the Company) in order to further enhance collaboration between these divisions.
Financial highlights for Fiscal 2013 include:
- Net loss of $3.5 million compared with a year-over-year loss of $16.6 million.
- Total revenues of $13.1 million, up significantly from $1.4 million in FY2012.
- Commission and fee income of $8.6 million (FY2012: $10.5 million).
- Net gain of $1.6 million on the disposal and mark-to-market gains of financial assets/liabilities (FY2012: Net loss $12.1 million).
- Interest and dividend income of $1.7 million, down from $3.0 million last year.
- A decrease in general and administrative expenses to $17 million (FY2012: $22.5 million).
"As a Hong Kong based financial services provider focused on domestic and international brokerage and corporate finance pursuits, Sunwah International's performance is inextricably tied to that of Hong Kong and worldwide capital and equity markets. Nevertheless, we continue to take measures to lessen the impact of these uncertain times on our bottom line, which has contributed in part to the year-over-year improvement we saw in Fiscal 2013," said Douglas Betts, President and Chief Executive Officer of Sunwah International. "As well, to capitalize on what we see as a unique, developing niche for Sunwah International, we continue to actively fine-tune our business model. In addition to pursuing various means of revenue diversification, we are positioning our strengthened international advisory services business to capitalize on our unique ability to pair select international businesses with Asian strategic investors, based on our relationship network and ability to leverage the well known Sunwah brand."
Sunwah International represents the financial services division of Sunwah Group, a highly reputable Asian based, international conglomerate.
Sunwah International's growth strategy focuses on China and parts of Southeast Asia. Specifically, the Company is positioning itself to capitalize on China's continued long-term potential and anticipated solid growth in the industries affected most by its development, particularly natural resources and infrastructure, where Sunwah International offers unique and targeted expertise as well as an extensive strategic investor network. The Company is also focused on Malaysia, Vietnam and the Philippines, countries that are increasing in strength in addition to being abundant in the resources China needs most.
For more information on Sunwah International's second quarter operating results, please see the Management's Discussion and Analysis (MD&A), which is filed on SEDAR and is also available on the Company's website at www.sunwahinternational.com .
The Company did not propose any dividend for the year ended June 30, 2013.
Extension of Convertible Debenture
On September 18, 2013, the Company and the Debenture Holders agreed to amendments to the Debentures, including an extension of the maturity date from 19 September 2013 to 19 September 2014. The amendments also include increasing the interest rate from 1% per annum to 8% per annum, an arrangement fee of 1% of the amount of the Debentures and a decrease in the exercise price from C$0.55 to C$0.48 per share. The Amendments are subject to regulatory approval and the approval of the minority shareholders.
In the interim, the Holders of the Debentures have agreed with the Company to take no action on the Debentures until approval by the minority shareholders and receipt of required regulatory approval, or failure by the Company to obtain the same.
About Sunwah International Limited
Sunwah International is a strategically positioned asset-based financial services provider, linking the global investment community with China's high growth economy. Leveraging a 20-year track record and significant relationships throughout Asia, Sunwah International is now positioned into three integrated divisions: Capital Markets Group, consisting of brokerage and financial services, including investment banking; Strategic Investment Group, a merchant bank focused on mining and natural resources; and our Asset Management Group specializing in private equity funds. The organization's primary subsidiary, Sunwah Kingsway Capital Holdings Limited is based in Hong Kong and listed on The Stock Exchange of Hong Kong. The Sunwah Kingsway group of companies comprises Sunwah International's primary operating subsidiaries and is licensed to provide a range of financial services. Sunwah International operates from six offices located in Hong Kong, Beijing, Shanghai, Shenzhen, Macau and Toronto.
China is widely recognized as an increasingly important player on the world's financial stage. As the country continues to grow, its greatest needs will lie in energy and resources. Following a recent restructuring, the Company is positioned as a middle tier provider of financial services in these sectors and an opportunistic investor in these and related sectors. Sunwah International's strategy is to use investment activities strategically to generate advisory services revenue while creating value for its shareholders through asset accumulation.
Founded in 1990, the Company is listed on the main board of the Toronto Stock Exchange under the symbol SWH.
This press release announcing the financial results for Sunwah International's fiscal year ended June 30, 2013 should be read in conjunction with the audited consolidated financial statements and management's discussion and analysis of Sunwah International Limited (the "Company") and its subsidiaries. This press release contains "forward-looking statements" as defined under applicable Canadian securities laws. These statements include, but are not limited to, statements made concerning our 2013 objectives, our strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan" or "continue", or similar expressions suggesting future outcomes or events. 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 Group, (416) 888-2323, [email protected]