Lawsuit provision hits Poly earnings
Poly Investments Holdings, a power generation-to-brokerage firm, saw its net loss widen last year to HK$238.13 million from HK$75.61 million a year earlier, due to an impairment loss at an associate and after making a provision for a lawsuit.
Poly said earlier this month it had agreed to sell its associate, Xi'an Gaoxin Hospital, for HK$150 million. However, Poly said yesterday in a statement it had suffered an impairment loss of HK$111.49 million from Gaoxin Hospital last year by writing down the value of the investment.
The company also made a provision for litigation claims of HK$89.66 million resulting from a court case involving an alleged guarantee given to a mainland bank by two subsidiaries in favour of a third party, it said.
It did not disclose further details of the lawsuit other than to say the group was opposing the claim and was planning to appeal against a judgment by a mainland court.
In last year's interim report, Poly said that another subsidiary had been named as respondent in a shipping dispute concerning the sum of HK$4.1 million but added that any eventual settlement was unlikely to have an adverse impact on its financial position.
Poly said its core business performed well last year despite the two incidents.
Gross profit rose 89 per cent to HK$41.33 million last year from HK$21.92 million a year earlier, while revenue rose 63.7 per cent to HK$616.71 million from HK$376.52 million. The growth came mainly from power generation and iron ore trading.
Its 30 per cent-owned Shanghai Hong Qiao Friendship Shopping Centre also performed well last year. Poly's share of its profit for the year was HK$7.78 million.
The company, which suspended trading on April 30 pending the statement, will resume trading today.