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Old 18-10-2016, 08:47 PM   #942
mrclubbie
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ST Engineering to write down investments in China JV units

ST Engineering to write down investments in China JV units

http://www.theedgemarkets.com.sg/sg/...china-jv-units

SINGAPORE (Oct 18): ST Engineering announced that joint venture units of Jiangsu Huatong and Jiangsu Huaren Kinetics (JHK) in China have ceased production from Tuesday to reduce operating losses.

ST Engineering will record a one-off $61 million charge under its land systems division for 3Q16. This consists of an impairment of ST Kinetics’ net carrying value in JHK and closure costs including staff compensation.

The one-off charge will reduce the ST Engineering’s earnings per share by 1.97 cent to 17.05 cents while having no material impact on net tangible assets per share.

Nevertheless, ST Engineering is maintaining its guidance for higher revenue and lower earnings for FY16 compared to FY15.

Pending a decision on its future, the management of JHK has formally tabled a proposal for cessation of production to the JHK board, which has 15 days to decide. The view of management is that the business will run out of money soon, impacting its ability to operate on an ongoing basis.

Shares of ST Engineering closed 1 cent higher at $3.19.
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