PRG says HK-listed subsidiary Furniweb issues profit warning

KUALA LUMPUR (Aug 6): PRG Holdings Bhd's 75%-owned Hong Kong-listed subsidiary Furniweb Holdings Ltd had today issued a profit warning after a preliminary review of Furniweb's unaudited accounts for the six months ended June 30, 2018 (1HFY18).

PRG is a property and construction group while Furniweb produces elastic yarn and furniture webbing. PRG told Bursa Malaysia today that the preliminary review of Furniweb's unaudited accounts showed a substantial decline in Furniweb's 1HFY18 net profit by approximately 75% from a year earlier.

"The shareholders of Furniweb and potential investors have been informed that, based on the preliminary review of the unaudited consolidated management accounts of the group for the six months ended 30 June 2018, there was a substantial decline in the group's net profit by approximately 75% in the period as compared with that for the corresponding period in 2017," PRG said.

Today, Furniweb told The Stock Exchange of Hong Kong Ltd that Furniweb's board believes that the group's profitability for 1HFY18 was mainly affected by the following factors:

"(i) decrease in sales volume as certain major customers were still undergoing their new product development and thus reduced their orders for existing products while certain other customers reduced their procurement as their local currencies depreciated against United States dollar (the USD);

"(ii) decrease in the group's revenue reported in Malaysian ringgit which appreciated against USD, our major sales denomination currency;

"(iii) increase in cost of sales, mainly raw material prices, which had not been passed on to customers;

"(iv) lower production volume as compared to the same period in the preceding year increased the weighing of fixed overheads over total cost of sales; and

"(v) additional corporate expenses were incurred during the period." — theedgemarkets.com

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