Crane and industrial machinery maker Yongmao Holdings warns that earnings for its 2HFY2022 ended March is likely to be &ldquo significantly lower&rdquo versus 2HFY2021 because of softer business conditions in China and fair value loss.

 

&ldquo The decline in net profits is due to lower revenue in China in light of the supply chain bottlenecks, a lacklustre property market and Covid-19 outbreak,&rdquo states the company on May 22.

 

&ldquo Land transportation and sea freight in China had increased significantly during the period under review due to supply shortage,&rdquo the company adds.

 

Yongmao says that it is expected to book a &ldquo significant&rdquo fair value loss on its financial assets, which might lead to a total comprehensive loss attributable to shareholders for 2H FY2022.

 

The company is expected to report its FY2022 before May 30 2022. It expects to remain profitable for the full year.

 

Crane operator Yongmao Holdings has posted earnings of RMB30 million ($6.2 million) for the 2HFY2021 ended March, 258.5% higher than earnings of RMB8.4 million in the 2HFY2020.

 

Earnings for the FY2021 stood RMB54.9 million, 8.1% lower than earnings of RMB59.7 million.

 

Revenue in China increased by RMB197.8 million in the same period, while sales in China and Asia contributed to 53.5% and 35.0% of the group&rsquo s 2HFY2021 revenue.

 

Earnings per share (EPS) for the 2HFY2021 and FY2021 stood at 33.77 RMB cents and 61.81 RMB cents respectively.

A first and final dividend of 1 cent per share was declared for the FY2021.

As at end-March, cash and cash equivalents stood at RMB66.3 million.

MAINBOARD-LISTED crane manufacturer Yongmao Holdings on Monday guided for a " significantly lower" net profit for the second half of the financial year ended March 31, 2020 (FY2020), compared with the same period last year. 

 

The decline in net profit is due to lower revenue in China, in light of the national lockdown to combat the Covid-19 pandemic in the first few months of 2020, the China-based firm said in a profit-guidance note.

 

In addition, due to the consolidation of Beijing Yongmao&rsquo s plant with Fushun, the group recorded a one-off obsolescence stocks adjustment and write-off, as well as higher cost of goods sold in the second half of FY2020 to adjust for an undercharge of goods sold in the first half.

 

Amid the virus outbreak, strict government containment measures were first implemented in China, where the firm' s major production plants operate. These measures were subsequently extended globally, in many instances resulting in full or partial national lockdowns, said Yongmao.