Wong's Intl. Reports 2019 EMS Revenue Down 10%
HONG KONG – Wong’s International Holdings reported 2019 EMS division revenue was HK$3.6 billion (US$459.2 million), a decrease of 9.8% year-over-year.
Profit for the EMS division was HK$159.2 million, a 24.2% decrease compared to 2018. The decrease is attributed to reduction in demand as a result of the current trade tension between Mainland China and the US.
Total 2019 revenue was HK$3.8 billion, down 5.8% compared to 2018.
Profit for the year was HK$266.3 million, down 81.2% year-over-year. Operating profit was HK$245.2 million, or 6.5% of revenue, compared to HK$524.8 million, or 13.1% of revenue, for 2018.
As of Dec. 31, cash and cash equivalents and short-term bank deposits were HK$1.18 billion.
Already affected by the China-US trade war, demand for the firm’s products is now facing considerable uncertainties posed by the Covid-19 outbreak. The spread of Covid-19 is impacting the supply chains and has caused disruption: limited access to employees due to quarantines, factory closures or manufacturing slowdowns and limited access to logistics to move goods.
The firm’s factories have taken necessary steps for the recovery of the normal level of production capacity under adequate health and safety measures. Manufacturing operations in January and February were gravely impacted, and sales of the EMS business for those two months decreased approximately 50% compared to the corresponding period in 2019.
To cope with the US tariff situation, the company has set up a manufacturing facility in Hai Duong Province, Vietnam, to cater mainly to US customers. This new production facility started production in March.
The directors expect the current market and operating conditions, as well as the uncertainty as to the intensity and the duration of the Covid-19 outbreak globally, will adversely affect the operating result of the EMS business for the first half of 2020.
Ed.: HK1 = US$0.13
