China Sky Chemical Fibre issues profit warning for FY2012-FY2013

Sinking demand and soaring costs blamed.

The Board of Directors of China Sky Chemical Fibre Company Limited and its subsidiaries announced that the Group is expected to record operating losses for the financial years ended 31 December 2012 (FY2012) and 31 December 2013 (FY2013) after a preliminary assessment of the Group’s financial results.

The losses were mainly due to the continual weakening domestic market demand, lower average selling prices coupled with increased raw material costs.

Management has also reported to the Board that in addition to the expected operating losses, the Company’s auditors have advised management to carry out review of the fair value of the Group’s fixed assets taking into consideration the Group’s financial performance and assets utilisation, in compliance with the Financial Reporting Standards. As a result of this review, management have noted that a potential material impairment on its property, plant and equipment may be required and such impairment, if made, will further contribute to the losses in FY2012.

Further details of the Group’s financial performance will be disclosed when the Company finalizes and announce its unaudited consolidated financial results for FY2012 and FY2013, on or before 15 March 2014.

As previously announced, the company has sought an extension until 15 March 2014 to announce its unaudited financial results for FY2012.