Thursday 28 Mar 2024
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KUALA LUMPUR: Parkson Holdings Bhd’s 52.71%-owned Hong Kong subsidiary Parkson Retail Group Ltd (PRGL) has issued a profit warning after the China International Economic and Trade Arbitration Commission ruled that it has to pay approximately 140 million yuan (RM83.82 million) to its landlord in Beijing, China.

The amount is for Parkson Retail Development Co Ltd’s (PRDC) continued occupation of four floors of the shopping plaza after the termination of its tenancy agreement. PRDC is a wholly-owned unit of PRGL.

In a filing with Bursa Malaysia yesterday, Parkson (fundamental:1.80; valuation: 2.4) said the arbitral award dated March 25 this year orders PRDC to pay the sum to Metro City Shopping Plaza. The matter was first brought up for arbitration on Dec 27, 2012.

According to an attached statement by PRGL, the approximate 140 million yuan payable to the landlord represents about 57% of the audited net profit of the group for the financial year ended December 2014 (FY14).

PRGL also said based on a preliminary review of its unaudited consolidated management accounts for the two months ended Feb 28, 2015, it does not expect its operating results for the first quarter of 2015 to be able to cover the impact from the arbitral award.

Hence, PRGL expects the profit of the group for the three months ended March 2015 will decline “significantly” compared with the corresponding period in 2014.

However, the company gave the assurance that the results of the arbitral award will not have a material adverse impact on its business and operations.

Trading in PGRL’s securities, which was suspended at 1.02pm on Monday, will resume from 9am today. The trading of Parkson’s shares, suspended since 2.31pm on Monday pending the PGRL announcement, will resume in tandem today.


The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

 

This article first appeared in The Edge Financial Daily, on April 1, 2015.

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