Internet data centre operator iLink Holdings has closed down operations in Beijing in the wake of oversupply and weak demand, forcing the Growth Enterprise Market-listed company to book HK$29.68 million of fixed-asset impairment losses.
The fixed loss contributed towards the widening of iLink's net loss to HK$39.84 million in the first quarter this year, from a loss of HK$3.96 million in the same quarter last year.
Turnover slipped 13.6 per cent year on year to HK$18.38 million while revenue costs rose 13.8 per cent to HK$16.55 million, resulting in a 72.8 per cent decline in operating profit to HK$1.83 million.
The company closed down its wholly owned Beijing data centre one year after it began operations. It will refer customers to competitor and business partner China Netcom, its provider of network connectivity. ILink will set up a new operation to provide value-added services.
In Beijing, operations turnover was only HK$1.67 million in the first quarter, while operating losses were HK$3.22 million, excluding the asset impairment loss.
The company said it would take a cautious approach in any future market expansion, despite identifying or engaging strategic partners in Singapore, Taiwan, Shenzhen and Guangzhou to provide data-centre services.
