Gelonghui, March 8, 丨 Hongfu Tang (01446.HK) announced that the company expects the loss attributable to the company owner to be no more than HK$38 million for the year ended December 31, 2023, while the profit attributable to the company owner for the previous year (as re-listed) was HK$5,300,000.
The Board believes that the main reasons for the reduction in profit attributable to company owners in fiscal year 2023 are as follows: 1. HK$17,400,000 of non-recurring government grants and subsidies received or received in fiscal year 2022 will no longer be recovered; 2. Despite the decline in revenue from the Group's retail business in Hong Kong, the pace of recovery stemming from the slow pace of recovery in the Hong Kong economy, particularly the restaurant industry, is slower than expected. However, in order to maintain the scale of operations, including the number of retail branches and number of employees, the Group did not reduce leasing expenses and employee costs accordingly to meet the Group's competitiveness and long-term strategy; 3. The decline in gross margin was due to rising raw material costs, wages and utility costs; 4. Expenses arising from the Group's plans to relocate several production operations (including write-off of property, plant and equipment, and inventory); and 5. Additional write-off of trade receivables based on significant doubts about the recovery of accounts receivable.
Despite the significant challenges to the Group's operating environment in fiscal year 2023, the Group's financial position remains strong.