BATTERY maker GP Industries : G20 0% on Monday (May 27) expects to record a net loss of between S$58 million and S$68 million for the financial year ended Mar 31, 2024, sinking into the red from a net profit of S$22 million from the previous fiscal year.
The group attributed the change from profit to loss to its share of attributable loss, including impairment losses for XIC Innovation, one of its industrial investments.
As the loss is non-cash in nature, it will not have a substantial adverse impact on GP’s current and future operating cash flow and future operating earnings, the group said in a profit guidance.
GP said XIC Innovation and some of its subsidiaries had received winding-up petitions filed by a bank in the High Court of Hong Kong, but they maintain and continue their business operations with the support of their major customers and suppliers.
XIC has also engaged a financial adviser to prepare and evaluate its restructuring programme. This includes exploring potential new funding from third parties to provide a runway to continue its business operations
The group is projecting its share of the impairment loss of XIC Innovation to be between S$71 million and S$77 million, as it holds a 39.13 per cent effective equity interest in the investment. As at Mar 31, 2024, GP no longer has significant influence over XIC Innovation, so it does not use the equity method to account for XIC Group’s results.
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Excluding its share of attributable loss on XIC Innovation, GP would have expected a net profit of between S$16 million and S$18 million for FY2024.
The group also noted a significant improvement in its operating earnings for FY2024 on improved gross profit margin and effective cost control measures. It expects its profit before finance costs and share of associates’ results for the fiscal year to range between S$53 million and S$55 million versus the S$35.1 million recorded in the previous corresponding period.
It will release its unaudited financial results for FY2024 by May 30.
Shares of mainboard-listed GP Industries ended 0.9 per cent or S$0.005 higher at S$0.52 on Friday.
