Chow Tai Fook in profit plunge
Listed Hong Kong jeweller Chow Tai Fook has warned shareholders its first half profit is likely to be 50 per cent less than for the same period last year.
In a statement filed with the stock exchange, the board said the decrease is mainly attributable to the year-on-year decline in revenue brought about by weak consumer sentiment in Hong Kong and Macau and a tighter gross profit margin.
The margin was impacted by both a change in the product mix with increased sale of gold products and unrealised hedging losses on gold loans for the period contrasting with an unrealised hedging gain in the same period last year.
“As the company is in the process of preparing the interim results of the group for the six months ended 30 September, the information contained in this announcement is only based on the preliminary review of the company’s management accounts which have not been reviewed or audited by auditors of the company.”
The size of the decline comes as something of a surprise, given the company revealed a four per cent increase in sales in the quarter to September 30 just four weeks ago.
Back then Chow Tai Fook described the Hong Kong and Macau retail market as “continuing lacklustre”.