PRG’s Furniweb flags substantial decline in FY19 results

PETALING JAYA: PRG Holdings Bhd’s 54.19%-owned subsidiary Furniweb Holdings Ltd expects to record a substantial decline in its financial performance for the financial year ended Dec 31, 2020 with a loss of RM43 million against a profit of RM900,000 reported in FY2018.

According to Furniweb’s filing with the Stock Exchange of Hong Kong, its profitability was affected by impairment loss on goodwill arising the acquisition of its subsidiary Meinaide Holding Group during the year.

Meinade’s principal business operations are carried out in China and have been facing a challenging operating environment as the Covid-19 outbreak has materially and adversely impacted general business activities in the country since January 2020.

Furniweb also explained that the acquisition resulted in an increase in administrative expenses due to the one-off professional fees incurred primarily for the acquisition.

Other factors contributing to the fall in Furniweb’s earnings are the impairment loss on assets held for the disposal of Premier Elastic Webbing & Accessories (Vietnam) Co Ltd as the disposal sum is lower than the carrying amount of the asset; impairment loss on goodwill attributed to Furnitech Components (Vietnam) Co Ltd due to weaker sales performance; as well as a loss from the Furniweb’s retail division attributed to weaker sales performance, higher fixed overheads and increased marketing expenses.