This was attributed to the impact of the pandemic.
Manufacturing firm Hong Wei (Asia) Holdings Company Limited reported its loss attributable to owners amounted to $70.2m in 2020, falling from a profit of $25.3m in the previous year.
The group attributed this to the impact of the COVID-19 pandemic on its operations.
“Global trade frictions remain a concern and the outbreak of the coronavirus has also impacted the Group’s sales activities,” Chairman Wong Cheung Lok said in his statement to the shareholders.
The loss for the year ended 31 December 2020 was mainly caused by the decrease in gross profit and recognition of impairment loss on right-of-use assets – forestlands and net loss arising from changes in fair value less costs to sell of biological assets during the year.
Gross Profit for the year decreased 34.3% to $55.3m from 84.1m; whilst its gross profit margin decreased to 16.7% from 21.2% year-on-year. This was linked to the drop in revenue and the increase in the unit cost of major raw materials during the year.
Revenue for the particleboards segment declined 16.8% to $330.2m from $396.7m; whilst no income generating activity was recorded in forestry segment.
The group also recognized a net loss of $55.1m from the changes in the valuation of biological assets. In 2019, Hong Wei (Asia) recorded a net gain of $1.7m.
For 2021, the group expects its operations are at risk of being affected if additional tariffs are imposed, in relation to the US and China trade war. This is aside from the continuing impact of the COVID-19 pandemic.
“The Group will closely monitor changes in the domestic policies and continue its efforts in taking proactive production cost saving initiatives, strengthening the controls of the inventory level, negotiating with customers regarding product pricing and considering the feasibility of developing more variety of specifications of particleboards in sizes and thickness to meet the need in different market segments,” the group said in its annual report.
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