Shanghai Able Digital Science&Tech Co., Ltd. — Earnings Release 1999

Dec 21, 1999

Listed Company Information

SE ASIA WOOD<1205> - Results Announcement South East Asia Wood Industries Holdings Limited announced on 21/12/1999: (stock code: 1205) Year end date: 31/12/1999 Currency: US$ (Audited) (Unaudited) Last Current Corresponding Period Period from 1/10/1998 from 1/10/1997 to 30/9/1999 to 30/9/1998 ('000) ('000) Turnover - Continuing : 37,375 56,433 - Discontinued : N/A N/A Operating Profit/(Loss) - Continuing : (17,259) (2,080) - Discontinued : N/A N/A Total Operating Profit/(Loss) : (17,259) (2,080) Share of Profit/(Loss) of Associated Companies : N/A N/A Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : (16,379) (621) % Change over Last Period : N/A EPS/(LPS)-Basic : (US 2.73 cents) (US 0.10 cent) -Diluted : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : (16,379) (621) 2nd Interim Dividend per Share : NIL NIL (Fin Div) (Specify if with other options) : N/A N/A B/C Dates for 2nd Interim Dividend : N/A Payable Date : N/A B/C Dates for (-) General Meeting : N/A Other Distribution for Current Period : N/A B/C Dates for Other Distribution : N/A Remarks: (1) Change of financial year The financial year end of South East Asia Wood Industries Holdings Limited (the "Company") has been changed from 30 September to 31 December. Accordingly, an audited results for the fifteen months ending 31 December 1999 will be prepared and published in April/May 2000. The change of financial year end will enable the Company to have the same financial year end as the Company's core business subsidiaries. The change is not expected to have any significant financial effects on the Company. (2) Loss per share The calculation of loss per share is based on the unaudited net loss attributable to shareholders for the twelve months ended 30 September 1999 of approximately US$16,379,000 (1998: US$621,000) and the weighted average number of 600,000,000 (1998:600,000,000) shares in issue during the year. Fully diluted loss per share is not shown because there is no dilution impact for both years. (3) Exceptional items 1999 1998 US$'000 US$'000 Provision for doubtful debts 634 2,260 (4) Taxation 1999 1998 US$'000 US$'000 Companies and subsidiaries Current - Overseas - - === === No provision for taxation has been made as the Group had no assessable profits arising in either Hong Kong or other relevant jurisdictions in which the Group operates for the year (1998: Nil). All subsidiaries operating in the People's Republic of China (the "PRC") are exempt from income tax for two years starting from their first profitable year of operations and are entitled to 50% relief from income tax for the following three years under the Income Tax Law of the PRC. Deferred taxation has not been provided, as the effects of all timing differences are insignificant. (5) Operations to be discontinued On 4 October 1999, the Board announced that Feston Manufacturing Limited ("Feston"), a wholly-owned subsidiary of the Company, and Nature Gain Limited ("Nature Gain"), an independent third party, had entered into the Disposal Agreement for the disposal by Feston to Nature Gain of its 100 percent interest in Luen Fat Hong (International) Marketing Development Limited ("LFH Marketing"), a subsidiary of the Company engaged in operations in Laos (the "Disposal"); and the Assignment Agreement for the assignment by Feston to Nature Gain of the receivables relevant to the Group's operations in Loas (the "Assignment"). The Disposal and the Assignment have been completed on 17 November 1999 and an exceptional loss of US$26,846,000 was incurred, which included the provision for permanent impairment in fixed assets of US$22,292,000 and the provision for the bad and doubtful debts of US$10,875,000. Such loss will be fully accounted for in the audited results of the Group for the fifteen months ending 31 December 1999: The unaudited results of the discontinued Laos operations of the Group for the twelve months ended 30 September 1999, together with the comparative figures for the corresponding period in 1998 were as follows: Unaudited Audited For the twelve months ended 30 September 1999 1998 US$'000 US$'000 Turnover 8,821 17,879 ===== ====== Loss before exceptional item 7,445 4,224 Exceptional item: Provision for bad and doubtful debts - 2,260 ------------ ---------- Loss before taxation 7,445 6,484 ====== ====== Given the Directors' belief that LFH Marketing are not posited to resume profitability in future, the Directors consider the Disposal will allow the Group to dispose of its major unprofitable manufacturing operations in Laos so that the Group will not only alleviate itself from further working capital requirement therefor but will also be placed in a better position to continue with the negotiations with its bankers for completing an overall debt restructuring programme. The Directors believe that the Disposal is necessary for the continual survival of the Group as a whole at this stage, given the poor earning prospects of LFH Marketing coupled with the considerable level of its ongoing interest burden on loans owing to financial institutions. As the Directors see no prospect of turnaround of the Group's business in Laos and accordingly decide to dispose of LFH Marketing via the Disposal, and given further that all export sales to non-Loas-based Thai customers arising from the Group's manufacturing operation in Laos are recorded in the books of Feston in the form of the Receivables, the Directors consider that it is appropriate for Feston to sell and assign the Receivables under the Assignment to Nature Gain along with the Disposal. (6) Further to the results announcement for the period ended 30/9/1999 released on teletext on 21/12/1999, the Company subsequently notified the Exchange that the turnover (continuing) figure for the current period should be US$37,375,000 instead of US$28,554,000. For more details, please refer to the press announcement today.