The beauty-products retailer Sa Sa International says it expects to post a record loss as high as HK$600 million (US$77.4 million) for the March year due to the collapse of Hong Kong’s tourism market in the wake of the Covid-19 crisis.
In a profit warning, chairman Simon Kwok said the figure – which contrasts with a $471 million profit for the prior year – includes a $40 million loss resulting from terminating leases when it exited the Singapore market, and trading deficits in other markets adding up to between $220 million and $260 million.
The rest of the potential loss, which the company expects will be between $500 million and $600 million, is the result of impairments, including on property, plant and equipment.
“The provision for the impairment losses is a non-cash accounting treatment, as such, it has no impact on the group’s cash position for the financial year. The Covid-19 epidemic also caused the foot traffic and retail sales to fall significantly at our stores outside of Hong Kong SAR, including the Macau SAR and Mainland China, The group’s e-commerce business was also affected as logistics services were disrupted by the epidemic.”
