On June 24th, Golden Power Enterprise (00723.HK) announced that it expected a net loss of no more than 4.6 million Hong Kong dollars for the company's owners in the 2024 fiscal year, compared to a surplus of about 0.3 million Hong Kong dollars recorded in the previous year. The group expects a net loss of no more than 10 million Hong Kong dollars for the whole year, compared to a net loss of about 5.7 million Hong Kong dollars in the 2023 fiscal year, of which the loss of no more than 5.4 million Hong Kong dollars (2023 fiscal year: 6 million Hong Kong dollars) will be apportioned to non-controlling interests.
The main reasons for the group's performance turning from profit to loss are: (i) the group's wood supply chain operation recorded losses, mainly due to its declining income and squeezed margins. The soaring energy and freight costs in Europe caused by the prolonged Russia-Ukraine war, the security crisis in the Red Sea, and the impairment losses of several receivables all contributed to the loss; and (ii) the surplus generated by the group's lending operation decreased, mainly due to the shrinking size of its loan portfolio leading to a decline in income, as well as impairment losses on receivables and interest, and debt-for-debt assets.