SINGAPORE (Feb 13, 1:35 p.m. ET) — Singapore-based Sunningdale Tech Ltd it will be facing a loss in the current fiscal year due to an impairment loss on goodwill of S$23.7 million (US$18.9 million).
This charge will result in an accounting loss for both the fourth quarter and the full financial year, which ended Dec. 31, the company said in a filing to the Singapore Stock Exchange.
The goodwill charges are related to acquisitions of Chi Wo Plastic Moulds Fty Ltd. and Ufe Pte Ltd.
Chi Wo has experienced a slowdown in sales and higher operating costs as wages in China escalated, said Sunningdale Tech. In the case of Ufe, one of the major customers was undergoing an internal restructuring.
“Given these factors, and taking into account the current economic outlook, the group has concluded that it is likely that the fair values of these units have been reduced below their carrying values,” the company said in the filing.
Without this charge, the company would have remained profitable for the quarter and the fiscal year, Sunningdale Tech said in a profit guidance report.