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Willas-Array falls deeper into the red due to 'intense' competition, stock clearance
WILLAS-ARRAY Electronics (Holdings) saw its net loss widen to HK$72.6 million (S$13.3 million) for its full year ended March 31, 2020, from a loss of nearly HK$19 million in the previous year.
This came as the Hong Kong-based electronic components distributor recorded a drop in revenue and lower gross profit margin.
"Intense" price competition amid weak demand as well as the group's clearance of buffer stock created from the previous financial year were the main reasons for the lower gross profit margin, Willas-Array said on Thursday night.
Moreover, the depreciation of the yuan further reduced the buying power of domestic customers in China, which meant the group had to offer "more competitive" pricing, it said.
Loss per share stood at 85.15 HK cents for the year, deepening from a loss per share of 22.36 cents previously.
Revenue fell by 13.9 per cent on the year to HK$3.18 billion, from HK$3.69 billion, mainly due to market uncertainties and weak economic sentiment amid the prolonged US-China trade tensions.
Several customers were affected by postponed or cancelled projects, which resulted in leftover stock despite the group's efforts to negotiate with customers and clear the inventory, Willas-Array said.
Factories in China were also ordered to shut down during the Covid-19 outbreak in early 2020, which caused "even more pressure" on its revenue.
The group's industrial segment remained its largest revenue generator, contributing HK$879.7 million during the fiscal year, although this is a 10.2 per cent decline from HK$979.3 million in the year prior.
Meanwhile, the telecommunications segment posted the biggest drop in sales, with its revenue contribution sinking 59 per cent to HK$280.2 million for the year, down from HK$682.7 million a year ago.
No dividend was recommended for fiscal 2020 as the group intends to retain cash for its business operations. It had paid a final dividend of 20 HK cents per share for the preceding year.
The mainboard-listed company's shares last traded at HK$0.28 on May 20.