Walcom confident despite China difficulties

Agricultural products and feed company Walcom posted its interim results for the six months to 30 June on Wednesday, keeping its head above water despite difficulties in its main market of mainland China.

The AIM-traded firm’s revenue for the period was HKD 20.7m, up marginally from HKD 19.3m in the first half of last year.

Gross profit was down, however, to HKD 11.7m from HKD 12.1m, as a result of a higher cost of sales.

Walcom managed to narrow its loss before tax to HKD 1.45m, compared to HKD 1.8m a year ago.

“The growth in the PRC economy remained slow during the first six months of the year and the performance of the pig farming industry did not improve during the same period,” said chairman Frankie Wong.

“However, the company was able to increase its revenue by seven per cent compared with the same period last year.”

Wong said that despite the adverse exchange impact of the renminbi and Thai baht during the period, and the continuing increase in production costs and operating expenses, the company incurred a smaller loss per share for the period of 2.46 Hong Kong cents, compared with a loss per share of 2.81 cents in the same period last year - an improvement of 13 per cent.

“The ongoing structural transformation of the Chinese economy has resulted in a slower growth in the economy in the past two years,” Wong explained.

“The consumer market has been inevitably affected, which has had a negative impact on the company's sales in the PRC market.”

He said that efforts were being made in exploring new markets in the region and to increase the company's portfolio of customers, with some encouraging results.

“In view of the coming high sales season of the company's products in the PRC market and the expected growth in the Asian markets in the second half of the year, the dire