SunMoon narrows Q2 net loss to S$304,000

SUNMOON Food Company posted a lower second-quarter net loss of S$304,000, compared with a loss of S$2.1 million in the year-ago period.

This was mainly due to a lack of negative gross margins resulting from seasonally low pricing of certain key products in China, and lower selling, distribution and administrative expenses owing to cost reduction measures taken by the group to streamline its operations.

For the three months ended Sept 30, its loss per share was 0.0426 Singapore cent versus 0.2843 cent.

Revenue slid 86 per cent to S$2 million from S$14.3 million mainly due to the group's decision to shift its focus from growing revenue at uncertain margin to ensuring sustainable growth with more certain margin, it said.

The supplier of fruit products and fresh fruits has reorganised its operation team and readjusted its strategic priorities in light of the shift, which was effected in Sept 2019.

Its sales to interested party Shanghai Yiguo E-Commerce and its related companies made up 15 per cent of the group's Q2 revenue, versus 42 per cent a year ago.

No dividend was declared, same as a year ago.

For the half year ended Sept 30, net loss was S$200,000 compared with a S$1.5 million loss a year ago, while revenue tumbled 76 per cent to S$7.4 million from S$30.2 million.

SunMoon said amid evolving market conditions and pressures on China's economy, its shift in focus is likely to negatively impact its short term revenue for fiscal 2019/20, and it will not be able to achieve year-on-year revenue growth.

"The group will continue to focus on its value added fresh fruit products in China and South-east Asia and expand our agri-food offerings," it said.

In a separate announcement, SunMoon said it is exploring various options to meet the minimum trading price criteria to exit the bourse's watch list and will update any material information as and when it arises.

SGX will assess the company for removal from the list if it records a volume-weighted average price of at least S$0.20 and an average daily market capitalisation of S$40 million or more over the last six months.

SunMoon's shares closed flat at S$0.065 on Monday.