PRG GEM-listed unit warns of decline in earnings

PETALING JAYA: PRG Holdings Bhd’s 75%-owned subsidiary Furniweb Holdings Limited, which is listed on the GEM of the Stock Exchange of Hong Kong Limited (HKEX), issued a profit warning for a 75% decline in Furniweb’s net profit in the six months ended June 30 as compared with that for the corresponding period in 2017.

The board believes that Furniweb’s profitability for the period was mainly affected by the decrease in sales volume as certain major customers were still developing new products and thus reduced their orders for existing products, while other customers reduced procurement due to the depreciation of their local currencies against the US dollar (USD).

Its profitability was also affected by the decrease in the group’s revenue reported in the ringgit which appreciated against USD, its major sales denomination currency; increase in cost of sales – mainly raw material prices, which had not been passed on to customers; 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 additional corporate expenses incurred during the period.

Furniweb said the information is based on the preliminary assessment by the board, mainly with reference to information currently available, as such, the actual financial results of the group for the period may be different from what is disclosed.

“Shareholders and potential investors are advised to read carefully the interim results announcement of the company for the period, which is expected to be published in or around mid-August 2018. Shareholders and potential investors are advised to exercise caution when dealing in the shares of the company,” Furniweb said.