Electronics company Willas-Array says it expects to report a slight loss or to just break even for the FY2023 ending March 31 based on a preliminary assessment of the unaudited consolidated management accounts for the eleven months ended February this year.
This is compared with a consolidated net profit of approximately HK$82.2 million ($14.11 million) for the FY2022 ended March 31, 2022.
Willas-Array says its expected consolidated net loss is mainly attributable to a decrease in sales for the FY2023 due to the weak export market as a result of inflation and rising interest rate in the US and European markets.
The adverse impact on domestic demand and factories’ operations in mainland China caused by the abrupt reversal of its zero-Covid policy, which caused a surge in Covid-19 infections during late 2022 and early 2023, have also not boded well for its operations.
The company also states that a drop in gross profit margin for the financial year, as the global semiconductor shortage has generally abated in mid-2022 and suppliers started to compete for market share, is expected to contribute to the loss.
The loss is also attributed to an exchange loss of approximately HK$29.6 million arising from the depreciation of the Renminbi in the current financial year as compared to an exchange gain of approximately HK$3.9 million arising from the appreciation of the Renminbi in the previous FY2022, as well as an increase in finance costs mainly due to higher average trust receipt loans and rising weighted average effective interest rate this financial year compared to last.
See also: Trump wins Republican nomination, setting up rematch with Biden
Willas-Array says it will disclose further details of the audited full year financial results of the group for FY2023 when it is expected to be published in end-May.
Shares in Willas-Array traded flat on March 13 at 53 cents.
