This article first appeared in The Edge Financial Daily on November 1, 2018

KUALA LUMPUR: PRG Holdings Bhd’s 63-owned subsidiary Furniweb Holdings Ltd said it expects net profit for the nine months ended Sept 30, 2018 (9MFY18) to be reduced by 86.5% year-on-year.

This follows a preliminary review of the group’s unaudited consolidated management accounts for 9MFY18.

In an announcement posted on PRG’s filing with Bursa Malaysia yesterday, Furniweb said this is mainly attributable to a decrease in revenue as certain customers became more prudent in their procurement plan in view of the uncertainty in the global trade market as a result of the ongoing US-China trade spat.

“[The] customers were also still undergoing their new products development, which led to them reducing their orders for existing products, as well as some others reducing their procurement as their local currencies depreciated against the US dollar.

“In light of the unfavourable business environment, we [also] increased our sales of relatively lower priced products,” said Furniweb, adding that the group saw an increase in cost of sales, mainly raw material prices resulting from the rise in crude oil prices, and lower production volume.

Furniweb’s third-quarterly results are expected to be released in the middle of this month.

In a separate filing, Furniweb warned shareholders and prospective investors of the risks of “substantial” price fluctuations when dealing in the company’s shares.

This is in view of the high concentration of shareholding in a small number of shareholders, Furniweb said.

“Shareholders and prospective investors should be aware that the price of the shares could fluctuate substantially even with a small number of shares traded, and should exercise extreme caution,” it added.

As at Oct 8, a group of 19 shareholders held 143.28 million shares or 28.43% of Furniweb’s issued shares. Such shareholding, together with 317.52 million shares or a 63% stake held by PRG, represented 91.43% of the issued shares as at Oct 8.

As such, only 43.2 million shares or 8.57% of the issued shares were in the hands of other shareholders.

During the Aug 29 to Oct 8 period, the closing price of Furniweb shares increased 175% from HK$0.335 to HK$0.920.