Willas-Array has reported earnings of HK$12.8 million ($2.2 million) for the 1HFY2023 ended September, down 70.5% compared to its earnings of HK$43.5 million for the same period last year.
Earnings per share have also dropped 71.1% y-o-y to 14.78 HK cents from 51.09 HK cents in 1HFY2022.
Between 1HFY2023 and 1HFY2022, revenue and cost of sales remained stagnant, recording only slight dips of 0.2% and 0.1% to HK$1.8 billion and HK$1.6 billion respectively in the period just ended.
Willas-Array is attributing its earnings decrease to a foreign exchange loss of approximately HK$32.8 million, arising mainly from the depreciation of the Renminbi in 1HFY2023, as well as an increase in finance costs mainly due to rising weighted average effective interest rate in 1HFY2023 as compared to 1HFY2022.
Excluding the foreign exchange difference, the company says its earnings would have been HK$45.6 million in 1HFY2023, surpassing that of 1HFY2022.
The company’s gross profit came in at HK$169.9 million for the period, a 0.6% y-o-y decrease.
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As at the end of September, Willas-Array had HK$363.2 million in cash and cash equivalents.
Willas-Array, which operates in Hong Kong, mainland China and Taiwan and is also listed on the Hong Kong Stock Exchange, says it incurred foreign currency risk mainly on sales and purchases that were denominated in currencies other than its functional currencies. “The exposure in foreign exchange rate risks mainly arises from fluctuations in foreign currencies against the functional currencies. Given the pegged foreign exchange rate between HKD and USD, the exposure of entities that use HKD as their respective functional currencies to the fluctuations in USD is minimal.”
However, the company says that foreign exchange rate fluctuations between other currencies could affect its performance and asset value. Willas-Array adds that it has a “foreign currency hedging policy” to monitor and maintain its foreign exchange exposure at an “acceptable level”.
Shares in Willas-Array closed flat at 50 Singapore cents on the SGX on Dec 15.
