Jewellery manufacturer Man Sang International warns it is moving from a profit last year to a loss for the six months to September 30.
Its profit for the period last year was HK$19.3 million (US$2.4 million).
The company lists three main reasons for the expected loss – an increase in finance costs as a result of a promissory note issued by the company as part of the consideration for the acquisition of a property in Chongqing, China, completed on July 28 at an interest rate of 8 per cent; an increase in finance costs because of an existing mortgage loan on the newly acquired property at an effective interest rate of 8.1 per cent; and a drop in revenue from sales at the group’s property project, China Pearls and Jewellery City, in Zhuji City.
The group’s board says this information is based on a preliminary assessment of its unaudited consolidated management accounts. The company’s interim results will be announced before the end of the month.