Embry Holdings Limited Issues Profit Warning: Expected Narrowing of Losses for FY2025

Key Highlights for Investors

• Significant Reduction in Expected Net Loss:
  Embry Holdings Limited (“the Company”, stock code: 1388) announced that, based on preliminary unaudited accounts, it expects a loss attributable to owners of the Company for the year ended 31 December 2025 (FY2025) to be between HK\$250 million and HK\$260 million. This marks a notable improvement over the loss of approximately HK\$373 million recorded for the year ended 31 December 2024 (FY2024).
• Non-Recurring, Non-Cash Adjustments Main Driver for Improvement:
  The narrowing of losses is primarily due to lower impairment charges and fair value adjustments, which are non-cash and non-recurring in nature.

Detailed Breakdown of Financial Adjustments

• Impairment of Property, Plant, and Equipment:
  For FY2025, the Group expects to recognise an impairment of approximately HK\$40 million, which is substantially lower than the HK\$119 million recognised in FY2024. The reduction is attributed to the Group’s cautious approach and the significant impairment already taken in FY2024, particularly regarding its Shandong and Changzhou production bases.
• Decrease in Fair Value of Investment Properties:
  The Group anticipates recording a decrease in the fair value of its investment properties located in Shanghai, Changzhou, and Hong Kong by about HK\$40 million for FY2025, compared to a larger decrease of HK\$69 million in FY2024. This is mainly in response to market price changes of surrounding properties.
• Impairment on Other Assets (Shenzhen Relocation):
  The Group will also recognise an impairment of approximately HK\$32 million in FY2025, lower than the HK\$39 million impairment in FY2024, related to the right to receive new properties due to a relocation arrangement in 2017.
• Foreign Exchange Gains:
  Unlike FY2024, when the Group experienced a net foreign exchange loss of around HK\$6 million, FY2025 is expected to show a net foreign exchange gain of about HK\$4 million, driven by the appreciation of the Renminbi.

Important Information for Shareholders

• Non-Recurring Nature of Key Adjustments:
  The improved financial outlook is largely the result of one-off, non-cash items. Investors should be aware that these adjustments do not reflect improvements in the underlying business operations, but rather accounting treatments and market revaluations.
• Potential Share Price Sensitivity:
  The announcement of a significant narrowing of losses could be viewed positively by the market. However, the fact that the improvement is driven by non-recurring items may limit the upside, as ongoing operational challenges may remain.
• Preliminary and Unaudited Figures:
  These figures are preliminary and subject to change following further review by the Board, the Company’s auditors, and the Audit Committee. Final audited results may differ from those disclosed in this announcement.
• Investor Caution Advised:
  The Company specifically advises shareholders and potential investors to exercise caution when dealing in the shares of Embry Holdings Limited, as the final results are yet to be confirmed.

Board Composition

As of the date of this announcement, the Board comprises four executive Directors: Madam Ngok Ming Chu (Chairman), Ms. Cheng Pik Ho Liza (Chief Executive Officer), Mr. Cheng Chuen Chuen, and Ms. Lu Qun; and four independent non-executive Directors: Mr. Chan Chi On, Mr. Lau Siu Ki, Mr. Lee Kwan Hung, and Prof. Lee T. S.

Conclusion

The expected reduction in losses signals a stabilisation in the Company’s finances, mainly due to less severe non-cash impairments and some positive foreign exchange effects. However, investors should remain vigilant regarding the sustainability of these improvements, as they are not the result of recurring business operations but rather accounting and market revaluation measures.

Disclaimer: The above article is based on preliminary, unaudited financial information and forward-looking statements provided by Embry Holdings Limited. Actual results may differ. This article does not constitute investment advice. Investors are urged to exercise caution and consider official audited results and further company disclosures before making any investment decisions.

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