Asian Citrus Holdings Ltd Trading Update (7498O)
11 August 2014 - 6:15PM
UK Regulatory
TIDMACHL
RNS Number : 7498O
Asian Citrus Holdings Ltd
11 August 2014
For immediate release 11 August 2014
Asian CitrusHoldings Limited
("Asian Citrus" or "the Group")
Trading Update
Asian Citrus gives the following update on the financial and
operational impact on the Group's Hepu Plantation and Beihai Juice
Concentrates factories ("BPG"), of Typhoon Rammasun ("the
Typhoon"), as previously announced on 22 July 2014, and separately
on the carrying value of BPG.
The Typhoon, which was the largest typhoon to hit Southern China
in 41 years, landed in Guangxi, where our Hepu Plantation and BPG
are located, on 19 July 2014. The Typhoon:
(i) destroyed 221,769 banana trees planted in 2013 in Hepu
Plantation, as a result of which there will be no harvest in
September 2014;
(ii) damaged certain farmland infrastructure and machinery and
buildings such as windbreaks, greenhouse facilities, high and low
voltage wires at Hepu Plantation and BPG; and
(iii) caused BPG to temporarily suspend activity at two of its
production plants, as a result of suspension of electricity supply.
Consequently, some inventory including raw material cannot now be
used for the purposes for which it was originally acquired.
Consequently, management currently estimate impairment losses
and provisions relating to the damage caused by the Typhoon of
approximately RMB36 million to assets will be required in the
Group's financial statements for the year ended 30 June 2014
("FY2014").Accordingly, whilst the board of directors (the "Board")
expects turnover for FY2014 to be broadly in line with current
market expectations, however, the core net profit(#) will now be
lower than current market expectations.
Additionally, the Typhoon caused a significant volume of
pre-mature fruit drop from existing oranges trees in Hepu
Plantation, which will result in decreased production yield in
particular for the upcoming winter and summer crops in the
financial year of 2015. It is also expected that the impact of the
Typhoon will prolong both the susceptibility of the orange trees to
citrus canker infection and soil leaching in the plantation areas.
The assessment of the net change in fair value of biological assets
for FY2014 is still under review; the subsequent effect of the
Typhoon will also be taken into account in the assessment.
The Group's insurance policy does not cover damage from natural
disasters and as such there will be no reimbursement of the losses
incurred from the Typhoon. The Board will review its insurance
cover to ensure it is appropriate going forward.
Separate to the impact of the Typhoon, the Board expects that a
material impairment loss in respect of goodwill (arising initially
on the acquisition of BPG in November 2010 for a consideration of
approximately HK$2.31 billion (equivalent to approximately RMB1.97
billion)) will be charged to the Group's statement of profit or
loss for FY2014, according to a comparison of the carrying value of
goodwill as at 30 June 2014 and the recoverable amount assessed
based on the current business and operating environment of BPG. The
assessment of the impairment testing of goodwill for FY2014 is
still under review.
The Board wishes to emphasise that the change in fair value of
biological assets and impairment loss in respect of goodwill are
non-operational and do not have any effect on cash flow of the
Group.
The information contained in this announcement is based only on
the preliminary assessment of the unaudited management accounts and
financial information of the Group for FY2014 and the subsequent
effect of the Typhoon damages available to the Board. The audit now
being conducted by the auditor of the Company on the management
accounts has not yet been completed and the management accounts may
still be subject to adjustments.
The full year results of the Group for FY2014 are expected to be
published in September 2014.
(#) Core net profit refers to profit/loss for the period
excluding change in the carrying value of goodwill, change in the
fair value of biological assets and share-based payments.
For further enquiries please contact:
Asian Citrus
Mark Ng, Chief Financial
Officer +852 2559 0323
Cantor Fitzgerald Europe
(NOMAD and Broker)
Rick Thompson / David Foreman +44 (0) 20 7894
(Corporate Finance) 7000
Richard Redmayne (Corporate
Broking)
+44 (0) 020 7067
Weber Shandwick Financial 0700
Nick Oborne, Stephanie Badjonat,
Tom Jenkins
This information is provided by RNS
The company news service from the London Stock Exchange
END
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