ISP Holdings Limited Issues Profit Warning: Significant Revenue and Gross Profit Growth Offset by Higher Losses

ISP Holdings Limited (Stock Code: 02340) has issued a profit warning for the financial year ended 31 December 2025, alerting shareholders and potential investors to key financial developments that may be price sensitive and could materially affect the company’s share value.

Key Financial Highlights for FY2025

• Revenue Surge: The Group expects to report a revenue increase of approximately 45% to 50% compared to the previous year (FY2024).
• Gross Profit Growth: Gross profit is anticipated to rise by about 120% to 125% year-on-year, reflecting improved operational performance.
• Higher Net Loss: Despite these positive trends, the company forecasts a loss attributable to equity holders between HK\$47.0 million and HK\$51.0 million for FY2025, a notable increase from the loss of approximately HK\$33.5 million reported in FY2024.

Key Factors Impacting Financial Performance

1. Growth in Business Volume: The increase in revenue is mainly attributed to the successful replenishment of workload through new contracts awarded during FY2024 and FY2025.
2. Non-Operating Gains: The Group recognized substantial interest income from restricted cash pledged for performance bonds, as well as fair value gains on financial assets.
3. Cost Efficiency: Cost savings were achieved in certain subcontracted projects, with subcontractors agreeing to reduced final payments.
4. Heightened Credit Risk: The company faced a challenging business environment in Hong Kong, marked by turbulence among major developers due to financial constraints. This led to a significant rise in credit risk within the construction industry. Substantial provisions for bad debts and expected credit losses on receivables and contract assets were made to mitigate these risks.
5. Litigation and Arbitration Costs: ISP Holdings incurred substantial litigation and arbitration expenses during FY2025, as several hearings were completed within the year.

Important Information for Shareholders

• Despite strong revenue and gross profit growth, the company expects a widening net loss due to increased provisions for bad debts, credit losses, and legal expenses.
• These factors are considered material and price sensitive, as they could have a direct impact on the company’s share value and investor sentiment.
• The financial figures disclosed are based on preliminary unaudited management accounts and have not yet been reviewed by the company’s independent auditor or audit committee.
• Final audited results may differ from the current estimates and will be officially announced by the end of March 2026.

Board’s Advice to Investors

The Board urges shareholders and potential investors to exercise caution when dealing in the company’s shares due to the uncertainties and potential impact of the above developments on the company’s financial position.

Leadership and Governance

As of the date of this announcement, the Board comprises Mr. Kingston Chu Chun Ho (Chairman), Ms. Leung Yuet Ngor (Executive Director), Mr. Lam Chun Kit (Non-executive Director), and three Independent Non-executive Directors: Mr. Lau Man Tak, Mr. Eric Lee Hon Man, and Mr. To Chun Wai.

Disclaimer: This article is based on preliminary unaudited financial disclosures from ISP Holdings Limited. Investors are advised to consult the official audited results and consider seeking professional advice before making any investment decisions. The information presented herein is for informational purposes only and does not constitute investment advice.

View ISP HOLDINGS Historical chart here