Fu Yu Corporation warns that it will report a loss for FY2024 ended Dec 31 2024 due to impairments totalling $3.8 million.
The company says it is making a one-off non-cash impairment of the remaining goodwill of S$3.3 million from its investment in subsidiary Fu Yu Supply Chain Solutions, which has stopped operating since the last quarter of FY2024.
Fu Yu has an ongoing probe into this unit, where, among others, there were reportedly payments made for services "which did not appear to have been rendered."
The company maintains that its core manufacturing operations will not be affected by what is happening at FYSCS.
Fu Yu faces a repeated EGM requisition from its single largest shareholder Victor Lim, who is reportedly unhappy with the deteriorating performance of the company.
Fu Yu's board has rebuffed Lim's bid to join the board but has indicated a willingness to work with him.
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The company reiterates its operations are set to improve as it has won new orders from new clients.
In addition, Fu Yu is making a one-off non-cash impairment of some $0.5 million on the property, plant and equipment of a subsidiary in China due to its recoverable amount being below its carrying value.
If these impairments totalling $3.8 million were excluded, Fu Yu expects to record a better operating profit for its FY2024 over FY2023.
The company says it will report its FY2024 on or before Feb 28 and further details on its performance and forward strategies will be disclosed.
Fu Yu Corp shares closed at 11 cents on Feb 14, down 1.79%.
