BRC Asia issues profit warning for Q2 2016 due to forex losses

BRC Asia issued a profit warning that it is expected to report a net loss for the second quarter ended March 2016.

The loss is attributable to foreign exchange losses on currency forward contracts entered into by the group to hedge purchase commitments for raw materials which are mainly denominated in US dollars, said the firm in an announcement to the Singapore Exchange.

As the group does not adopt hedge accounting, changes to the fair values of foreign currency forward contracts are recognised in profit or loss, it elaborated.

The profit guidance is based on the preliminary review of the group's unaudited Q216 financial results.

The stock fell one Singapore cent or 1.6 per cent to finish at 60 Singapore cents on Monday.