Giordano International says it has turned around its performance in the second half but will still record a loss for the full year.
The Hong Kong-listed apparel company has told shareholders in a profit warning to expect a loss of between US$14 million and $16.7 million for the full year to December.
That follows a profit of $29.7 million in 2019.
As reported last August, Giordano International recorded a loss for the six months to June 30 of $22.6 million. However, preliminary unaudited figures for the second half suggest a net profit of between $5.8 million and $8.4 million due to improving consumer sentiment and retail sales in its core markets.
“The forecasted net profit has not taken into account further potential asset impairment charges, if any,” said chairman and CEO Peter Lau in the stock-exchange filing. “That said, the profitability is unable to turnaround the loss recorded for the full year.”
He said the company would continue to “grasp all available retail sales, online sales and franchise opportunities” to maximise its performance.
“The recent surge in the number of Covid-19 cases reported in a number of the company’s markets, particularly in Hong Kong, Malaysia and South Korea, reflects that the situation will remain volatile in the near future. However, other markets, such as Mainland China and Taiwan, are showing signs of adjustment to the pandemic and gradual recovery,” he said.
The group has around $142 million in cash and bank balances, net of bank loans, and inventory of about $56 million, leaving it in a strong financial position despite the losses.
Final results will be released in March.