Sunwah International Announces Q1 FY2019 Results
TORONTO, Nov. 14, 2018 /CNW/ - Sunwah International Limited, TSX: SWH ("Sunwah International" or the "Company"), a Hong Kong based investment firm and member of major Asian conglomerate, Sunwah Group, today announced its financial results for the first quarter ended September 30, 2018. The results reflect the dilution of its interest in former principal indirect subsidiary, Sunwah Kingsway Capital Holdings Limited ("SWK"), and SWK's subsequent deconsolidation for accounting purposes from Sunwah International in FY2018. As a result, the Company now accounts for SWK as an investment under the equity method in compliance with Accounting Standards.
Sunwah International recently further reduced its shareholding in SWK, one of Hong Kong's top middle tier financial services providers, from 34.65% to 28.36% as a result of the completion of the debt settlement as announced in the press release dated July 13, 2018. Sunwah International ceased to be SWK's controlling shareholder although it continues to participate in the financial services industry and SWK's success through its remaining majority equity investment in this business. The Company continues to hold its major assets in the financial services sector through its investment in SWK.
Q1 FY2019 Results
Previously, the operating and financial results of Sunwah International and its subsidiaries (collectively "the Group") were organized according to SWK's operating segments, and SWK was accounted for as a subsidiary; however, with the deconsolidation of SWK, the Group now presents its results according to three new divisions: (1) Financial Services, comprising results from the Group's remaining equity interest in SWK; (2) Technology Products and Services, which includes the sale of software products and the provision of related maintenance services conducted by non-wholly owned subsidiaries; and (3) "Strategic investments and other activities".
Highlights for continuing operations (All figures quoted are in U.S. dollars.):
- A loss attributable to shareholders of the Company of $0.47 million (Q1 FY2018: loss of $0.26 million)
- A loss before tax of $0.47 million (Q1 FY2018: loss of $0.24 million)
- Total revenues of $0.19 million (Q1 FY2018: $0.2 million)
- Cost of sales of $76,000 (Q1 FY2018: $89,000)
- General and administrative expenses of $0.28 million (Q1 FY2018: $0.23 million)
- Finance costs of $18,000 (Q1 of FY2018: 0.11 million)
- Share of results of SWK under equity method: Loss of $0.38 million
- Technology Services Division: Net gain of $13,000 (Q1 FY2018: Net gain of $42,000)
- Strategic investments and other activities: Net loss of $0.19 million (Q1 FY2018: Net loss of $0.29 million)
"Sunwah International is actively pursuing a variety of ways to expand and diversify our investment base with the aim of bringing value to shareholders. We believe this new structure to be the best way for us to participate in SWK's success at this time, and that the better-balanced allocation of resources will bring benefits to the Company moving forward," said Michael Choi, CEO of Sunwah International. "As a potential investment in our strategic investment segment, we are looking at opportunities in the food and beverage industry where we can leverage the strategic strengths and relationship network of Sunwah Group and look forward to providing updates on initiatives in this space over the months to come."
As announced in a press release dated November 1, 2018, the Company has entered into a memorandum of understanding to acquire HFL Limited, a Hong Kong based food and beverage company. The acquisition is subject to the entering into of a definitive agreement among the parties and satisfaction of the closing conditions to be included in the definitive agreement. The Company wishes to clarify that the potential acquisition of HFL Limited will be brought into its Strategic Investment Group, as an investment, and the Company will not take on responsibility for operations.
Toronto Stock Exchange Remedial Review
As previously disclosed, the Toronto Stock Exchange ("TSX") informed the Company in July 2018 that its common share listing was under review regarding its ability to meet continued listing requirements following the reduction of its interest in SWK. Management is actively reviewing the Group's structure and its operations in order to bring value to shareholders and to meet the continuing obligations of the TSX; however, there is no assurance that the Company will meet continued listing requirements.
For more information on Sunwah International's first quarter operating results, please see the Management's Discussion and Analysis (MD&A) and complete financial statements, which are filed on SEDAR and also available on the Company's website at www.sunwahinternational.com.
About Sunwah International Limited
The Company's current primary investment interest, Hong Kong based Sunwah Kingsway Capital Holdings Limited, is listed on the Stock Exchange of Hong Kong under the stock code 00188. Sunwah Kingsway is licensed to provide a range of financial solutions in Hong Kong and abroad that include award-winning brokerage services and innovative corporate finance offerings.
Forward-Looking Statements
This press release announcing the financial results for Sunwah International's first quarter ended September 30, 2018 should be read in conjunction with the unaudited consolidated financial statements and management's discussion and analysis of Sunwah International Limited (the "Company") and its subsidiaries.
This press release contains certain statements that reflect management's expectations and objectives for the Company's future performance, opportunities and growth, which statements constitute "forward-looking information" and "forward-looking statements" (collectively "forward-looking information") under applicable securities laws. Such statements, other than statements of historical fact, are predictive in nature or depend on future events or conditions. Forward-looking information involves estimates, assumptions, judgments and uncertainties. These statements may be identified by the use of forward-looking terminology such as "may", "will", "should", "anticipate", "expect", "believe", "predict", "estimate", "continue", "intend", "plan" and variations of these words or other similar expressions. Specifically, this press release includes forward-looking information in respect of our 2019 objectives, our strategies to achieve those objectives, the completion of the acquisition of HFL Limited and the timing thereof. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking information. Forward-looking information is provided as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.
Except as required by applicable law, management and the board of directors of the Company (the "Board of Directors") undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE Sunwah International Limited
Kristen Humphrey, Sunwah International Limited, (416) 888-2323, [email protected].
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