Key Takeaways:
Johnson Electric Holdings Ltd. (00179.HK) issued a profit warning, expecting net profit for the financial year ended March to fall between 21% and 25% to a range of $197 million to $207 million.
The company said in a statement that the decrease was “mainly attributable to higher distribution and administrative staff costs, the impact of foreign exchange movements on operating expenses, increased provisions for claims and compensation as well as other operating items.”
These factors led to a drop in net profit of approximately 12% to 16% before the company recognized a non-cash impairment of intangible assets related to a past acquisition and recorded unfavorable fair value changes on certain investments.
The profit warning from the Hong Kong-listed motor manufacturer is expected to pressure its stock price. The company’s next catalyst will be the release of its full-year results, which will provide further details on the extent of the cost pressures and the impact of the impairment charge.
This article is for informational purposes only and does not constitute investment advice.
