TIDMACHL

RNS Number : 7498O

Asian Citrus Holdings Ltd

11 August 2014

For immediate release 11 August 2014

Asian CitrusHoldings Limited

("Asian Citrus" or "the Group")

Trading Update

Asian Citrus gives the following update on the financial and operational impact on the Group's Hepu Plantation and Beihai Juice Concentrates factories ("BPG"), of Typhoon Rammasun ("the Typhoon"), as previously announced on 22 July 2014, and separately on the carrying value of BPG.

The Typhoon, which was the largest typhoon to hit Southern China in 41 years, landed in Guangxi, where our Hepu Plantation and BPG are located, on 19 July 2014. The Typhoon:

(i) destroyed 221,769 banana trees planted in 2013 in Hepu Plantation, as a result of which there will be no harvest in September 2014;

(ii) damaged certain farmland infrastructure and machinery and buildings such as windbreaks, greenhouse facilities, high and low voltage wires at Hepu Plantation and BPG; and

(iii) caused BPG to temporarily suspend activity at two of its production plants, as a result of suspension of electricity supply. Consequently, some inventory including raw material cannot now be used for the purposes for which it was originally acquired.

Consequently, management currently estimate impairment losses and provisions relating to the damage caused by the Typhoon of approximately RMB36 million to assets will be required in the Group's financial statements for the year ended 30 June 2014 ("FY2014").Accordingly, whilst the board of directors (the "Board") expects turnover for FY2014 to be broadly in line with current market expectations, however, the core net profit(#) will now be lower than current market expectations.

Additionally, the Typhoon caused a significant volume of pre-mature fruit drop from existing oranges trees in Hepu Plantation, which will result in decreased production yield in particular for the upcoming winter and summer crops in the financial year of 2015. It is also expected that the impact of the Typhoon will prolong both the susceptibility of the orange trees to citrus canker infection and soil leaching in the plantation areas. The assessment of the net change in fair value of biological assets for FY2014 is still under review; the subsequent effect of the Typhoon will also be taken into account in the assessment.

The Group's insurance policy does not cover damage from natural disasters and as such there will be no reimbursement of the losses incurred from the Typhoon. The Board will review its insurance cover to ensure it is appropriate going forward.

Separate to the impact of the Typhoon, the Board expects that a material impairment loss in respect of goodwill (arising initially on the acquisition of BPG in November 2010 for a consideration of approximately HK$2.31 billion (equivalent to approximately RMB1.97 billion)) will be charged to the Group's statement of profit or loss for FY2014, according to a comparison of the carrying value of goodwill as at 30 June 2014 and the recoverable amount assessed based on the current business and operating environment of BPG. The assessment of the impairment testing of goodwill for FY2014 is still under review.

The Board wishes to emphasise that the change in fair value of biological assets and impairment loss in respect of goodwill are non-operational and do not have any effect on cash flow of the Group.

The information contained in this announcement is based only on the preliminary assessment of the unaudited management accounts and financial information of the Group for FY2014 and the subsequent effect of the Typhoon damages available to the Board. The audit now being conducted by the auditor of the Company on the management accounts has not yet been completed and the management accounts may still be subject to adjustments.

The full year results of the Group for FY2014 are expected to be published in September 2014.

(#) Core net profit refers to profit/loss for the period excluding change in the carrying value of goodwill, change in the fair value of biological assets and share-based payments.

For further enquiries please contact:

 
 Asian Citrus 
 Mark Ng, Chief Financial 
  Officer                            +852 2559 0323 
 
 Cantor Fitzgerald Europe 
  (NOMAD and Broker) 
 Rick Thompson / David Foreman       +44 (0) 20 7894 
  (Corporate Finance)                 7000 
 Richard Redmayne (Corporate 
  Broking) 
                                     +44 (0) 020 7067 
 Weber Shandwick Financial            0700 
 Nick Oborne, Stephanie Badjonat, 
  Tom Jenkins

This information is provided by RNS

The company news service from the London Stock Exchange

END

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