Published April 18, 2009

Five companies issue profit warnings

By JOYCE HOOI

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A RASH of profit warnings came from at least five companies yesterday as the economic downturn makes its presence felt on bottom lines.

Three companies - Armarda Group, Excelpoint Technology and China Yongsheng - braced the market for first quarter net losses to March 31 this year.

The other two - CPH and New Wave Holdings - warned of a net loss for the full financial year ended March 31.

CPH said: 'The group will be making allowances for impairment in the carrying value of its capitalised development expenditure, as well as the writing down of inventories to net realisable values.'

New Wave will make a provision for impairment loss on the carrying value of goodwill on investments in two subsidiaries, Fidelis International and Manufacturing Network.

All five firms cited the dismal economic climate as a factor affecting revenue.

Excelpoint Technology said in an announcement on the Singapore Exchange website: 'After evaluating the performance to date, the board would like to advise that the group expects to suffer losses in Q109 as it faced an increasingly challenging business environment from the global economic slowdown which resulted in a decline in sales.'

China Yongsheng, a building materials firm, attributed its reduced revenue for Q1 to lower demand for its ready- mixed concrete, triggered by the economic crisis and a general decline in construction activity.

Revenue was not the only thing taking its toll on the bottom line in yesterday's round of profit warnings.

The Armarda Group also cited the cost of an employee share option scheme and the amortisation cost of intangibles as an issue, while New Wave Holdings said its earnings were affected by exchange losses from fluctuations of the US dollar against the Singapore dollar.