18th Sep 2019 14:13
(Alliance News) - Animal additives producer Walcom Group Ltd on Wednesday said it is in discussions for further funding arrangements, as it reported a fall in first half revenue due outbreak of African swine fever in China.
In the six months to June 30, the company's revenue more than halved to HKD8.7 million, roughly GBP891,576, from HKD19.2 million in the same period in 2018.
The company did however narrow its losses to HKD3.3 million from HKD9.9 million. General and administrative expenses fell sharply to HKD4.6 million from HKD13.6 million and selling and distribution expenses fell by 53% to HKD2.7 million from HKD5.8 million.
Walcom said there was lower demand for its products due to an outbreak of African swine fever and since the disease has no known cure, the Chinese government has culled affected pigs to prevent it spreading. The swine herd population in China has "decreased considerably since the outbreak", Walcom said.
The firm also added that the Chinese economy grew slowly in the first half 2019, amid ongoing trade tensions with the US.
Earlier in September, Walcom warned that it may be forced into liquidation if it is unable to address its "working capital shortfall".
Chair Frankie Wong said on Tuesday: "Over the past 12 months the company has made regular announcements in relation to the weak performance of the group, which as a result of the aforementioned factors, has continued to place added pressure on the group's working capital position.
"The board will continue to closely monitor the group's working capital position and is in discussions regarding seeking additional funding arrangements to safeguard its liquidity."
Shares in the company were untraded in London on Wednesday afternoon, last quoted at 0.36 pence each.
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