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Luxking expects 17m yuan impairment of trade receivables for FY19
CHINESE adhesive tape product manufacturer Luxking Group Holdings on Friday updated that after much effort and various actions taken, the group is still not successful in recovering outstanding receivables from a customer which has become uncontactable after closing its factory at Guangzhou without giving any advance notice.
"This customer has been trading on a regular basis with the group since 2003 and the last payment received from this customer was in February 2019. The group recently discovered that the customer had shut its operations at Guangzhou and all assets were removed from the factory and the owner has absconded," it said.
Based on a preliminary review, Luxking is expecting an impairment of trade receivables at about 17.4 million yuan (S$3.5 million). This is expected to have a significant impact on the group's financial results for its unaudited financial results for FY2019.
"Notwithstanding that, from the cash flow perspective, the group is able to continue its operations as usual," it said.