Hong Kong – Sinomax, a flexible foam company with operations in China, said its profits for 2017 could be between 47% and 53% less in 2017 than in the 2016 financial year.
Profits are likely to be between HK$47 m and HK$53 m ($6m -$6.8 m), the firm said.
There are two main reasons for the fall in profits. The first of these is the costs incurred in a trial run production of its facility in La Vergne, Tennessee, and recruiting a sales force there.
The second reason cited by the company is the 'significant increase in the purchase price of a key raw material for polyurethane foam, namely toluene diisocyanate compared with the same period last year', it said.
Sinomax stressed that this is a profit warning based on preliminary data which has yet to be properly audited. The announcement was made to the Hong Kong stock exchange.
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