7th May 2019 13:18
LONDON (Alliance News) - Walcom Group Ltd on Tuesday said African swine fever epidemic shrank sales in China and led to a widened annual loss.
The animal feedstuff company posted a pretax loss of HKD8.6 million, or GBP834,772, for 2018, substantially more than HDK4.9 million loss the year before.
"The outbreak of African swine fever since August 2018 has spread widely all over China. This pig disease, for which there is no readily available vaccine, is highly contagious and lethal to pigs. As a result, pig farms have reduced their operations and the number of pigs has been reduced further. It is reported that a total of two million pigs have been culled since the start of the epidemic. Accordingly, the demand for feedstuff and feed additive products, including the group's products, have reduced significantly as well," said Walcom Chair Frankie Wong.
Due to this, sales in China dropped 38% to HKD16.0 million in 2018 from HKD25.8 million in 2017, causing overall revenue to fall 22% to HKD34.7 million from HKD44.5 million.
Looking ahead, Walcom anticipates a tough 2019 and is looking at any option which could improve its cash flow.
"Although it is currently facing a very constrained working capital position, the company continues to consider all possible options to improve the cash flow situation. Bearing all of these factors in mind, the board believes 2019 will be a difficult year for the group as the board anticipates a slower Chinese economy and a volatile global economic outlook for the year," said Wong.
Shares in Walcom were untraded at 0.38 pence on Tuesday.
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