LAM Soon Food Industries saw net profits slump 63.72 per cent to $12.39 million for the six months to June 30 as the plummeting yuan ate into export sales of oils and flour.
Announcing the results, company chairman Whang Tar-choung said: ''The severity of the yuan exchange rate volatility which we experienced during the first half was beyond management expectation.
''Export sales of both oils and flour which were already sagging towards the end of 1992 were sharply curtailed to avoid exchange risk. This in turn led to overstocking and a surge in material storage costs in Hong Kong, particularly during the second quarter.'' Earnings per share tumbled to four cents from 11 cents in the same period last year. The dividend has been halved to 1.5 cents.
Market forecasts for the full year, according to The Estimate Directory, show a consensus figure of $74 million, a four per cent drop on the previous year.
Lam Soon's own forecasts were knocked out of kilter last year, but the group is confident it is now at the end of a trying period and on track for improved sales and performances in the second half.
Mr Whang said: ''Earlier in the year we thought that positive factors such as our co-operation agreement with Hop Hing, macro-economic policy rationalisation in China and growth in our affiliated frozen dough and retail bakery business would start to have some ameliorating effects on the [external] structural difficulties faced by your company.