14 Oct, 2008 - Singapore-based food, dairy, fruit juice and meat company QAF Ltd has posted a profit warning for the quarter ending 30 September due to rising production costs and a slump in selling prices caused by the global financial crisis.
QAF, which owns a number of companies throughout Asia and Australia, revealed it expects the before-tax loss for Q3 to be “substantially higher” than the S$1.5 million deficit it posted at the end of June 2008.
The performance of its Chinese apple juice division as well as its meat and animal feed operations in Australia incurred most losses, the company admitted.
“Both divisions suffered from having to purchase raw materials at harvest time (around the end of 2007 and early 2008) when there was global escalation of food prices,” a QAF statement said.
“It added: “This has resulted in high production costs and the onset of the global economic downturn has also affected the divisions’ selling prices as trading conditions became difficult."
The firm’s profits have also been hit by “unrealised foreign exchange” losses arising from the strengthening of the Singapore dollar. The Singapore Stock Exchange’s rejection of the acquisition proposal by Iconic Global Ltd and the consequent “remaining investment cost of S$1.5 million in Iconic in the third quarter” woud also have an effect, said QAF.
The company said it would release its results on 14 November.