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Hu An Cable says two-thirds of key segment's order book delayed
TWO-THIRDS of Hu An Cable Holdings' 706 million yuan (S$157 million) order book in the key power generation and transmission sector has been delayed until further notice, the company announced on Tuesday evening.
The cable and wire maker also revealed in response to queries by Singapore Exchange that 88 per cent of its trade receivables, after impairment, have been owed to the company for six months to a year.
Hu An Cable on Aug 31 posted a 440.1 million yuan net loss for the three months ended June 30, 2015, down from a 14.6 million yuan net profit in the year-ago period. Its net loss at the year's halfway mark stood at 549.8 million yuan, down from a 15.1 million yuan net profit in the first half of 2014.
In its Tuesday response, Hu An Cable explained that it suffered a 17.8 million yuan hit in its power generation and transmission segment due to a sales return from a delay in delivery. The company also said that 466 million yuan on its order book has been delayed until further notice.
The company also said that 80 per cent of its total doubtful debt was attributable to 10 customers. About 800 customers account for the remaining 20 per cent of total doubtful debt.
All of the company's doubtful debt have been due for more than a year. After impairment, 88 per cent of trade receivables has been held between 181 and 365 days, and 5 per cent for one to two years, Hu An Cable reported.
Hu An Cable also explained that a prepayment of 310 million yuan for copper rods, an amount that may not be recoverable because the supplier has since declared bankruptcy, was made despite falling demand for copper rods because the company still required copper for its wires and cables products.
The company said it had also placed a larger-than-typical order with the supplier because of "the local government's appeal for our support of the supplier".
Hu An Cable's shares closed flat at 0.9 Singapore cent on Tuesday.