CP Pokphand losses mount to US$109m
CP Pokphand, the Hong Kong listed arm of the troubled Thai-based
empire, yesterday revealed the damage wrought by the Asian crisis -
particularly the turmoil in Indonesia - announcing an attributable net loss of US$109.6 million for the year to December.
The company, which has net current liabilities of US$542.05 million and last month admitted it faced cash-flow problems and was in talks
with lenders, said the main factor behind the loss was the decision to write down its Indonesian assets to zero, resulting in a US$20.7 million provision.
"Our decision to write down our Indonesian assets during the last
financial year represents prudent management as it means there is no
future impact on the company from the current political turmoil there," company president Sumet Jiaravanon said.
The Indonesian provision was part of a net exceptional loss of US$30.4 million, which also included US$10 million of provisions for falls in investment values. A further US$76 million loss flowed from associates.
Included in that figure was a 442.7 million yuan (about HK$411.97
million) loss at the company's 70 per cent owned Ek Chor China
Motorcycle.
The company, part of an empire headed by Dhanin Chearavanont and
one of the biggest foreign investors in the mainland, recently sold its interest in Shanghai-Ek Chor Motorcycle for 106 million yuan.
Pokphand was also hit by the sharp devaluation of the Thai baht, which buffeted the performance of 25 per cent-owned Thai-based Charoen Pokphand Feedmill. (Another one I got out of just in time. - try)
Losses from agri-business operations in Thailand amounted to US$54.5
million. The losses were prompted by "significant foreign currency
obligations". A breakdown of losses by activity shows industrial operations overall suffered the next biggest loss at $53.3 million.
Partly offsetting the three worst performing areas, the company said,
was a strong performance by its agri-business division on the
mainland, which made a profit of US$35.9 million.
Mr Jiaravanon said the company was "aggressively tackling our problems" with plans to streamline the business.That, he said, coupled with regional economic recovery, would result in "a stronger more profitable company this time next year".
The auditors have disclaimed their opinion on the results because of the fundamental uncertainty about the going concern basis on which the statement had been prepared.
Loss per share was 4.97 US cents and no final dividend was recommended.
Next Friday CP Pokphand will hold meetings to be aimed at persuading
holders of certain of its floating-rate notes to revoke redemption notices amounting to US$92.8 million in repayments.
CP Pokphand's shares have plunged from HK$1.12 on April 22 to just 36
cents since the extent of its problems emerged.
Rumours have suggested Hongkong Bank could have a HK$500 million
exposure to the company. |
