Office furnishings distributor Logic International has blamed falling sales in Hong Kong and hefty investment in China for its slide into the red in the 10 months to January.
Speaking after an extraordinary meeting held to ratify a $70 million rights issue, executive director Simon Ngan Man-wai said the unaudited $2.04 million loss during the period - revealed when the rights issue was announced last month - reflected sales which were 30 per cent below expectation.
'Sales fell last year as fewer companies relocated their offices,' he said.
'Even if they moved, they preferred keeping their old furniture to renewing it.
'Last year's sales were unexpectedly worse.' Mr Ngan said another problem was the more than $100 million invested in setting up three furniture manufacturing plants, five showrooms and a satellite office across the border.
The loss was against a $28.4 million profit in the previous comparable period.
Mr Ngan said he was confident that Logic would return to the black in the coming fiscal year.
