Yue Yuen Industrial has warned investors that its results for the first quarter of 2020 will show a net loss of $50 million to $70 million, compared with a gain of $75 million in the year-ago period, because of the disruption of its supply chain and the lockdown of the Chinese retail stores that belong to its Pou Sheng subsidiary.
Manufacturing revenues went down by 10 percent during the quarter. The group has moved much of its production outside China, where most of its facilities were closed during the coronavirus outbreak, but factories in other countries have been affected by shortages of raw materials and other inputs coming from China.
Most of Yue Yuen’s Chinese plants are now operating again, but they have been brought to a standstill in some other countries where local governments have ordered shutdowns because of the pandemic.
Meanwhile, Pou Sheng suffered a sales decline of 25 percent in the local currency, down to the equivalent of about $700 million, as the majority of its stores were closed in February and the beginning of March. By now, 98 percent of them have resumed operations, but the company warned that consumer spending and the business momentum may need some time to fully recover.
