United Food Holdings Limited expects to incur a “significant" loss before tax of up to approximately $119.5 million or RMB550 million in its upcoming second quarter results ending June 30, 2015.
The producer and supplier of soybean products and other businesses said it suffered higher operating expenses in its operations in China due to higher costs of utilities such as electricity.
This was an indirect result of anti-pollution measures implemented by local Chinese authorities, it said in a statement to the stock exchange.
Pursuant to that, United Food has sold five shipments of raw soybeans to avoid greater losses, which were yet to be processed.
The firm also decided to stop importing soybeans for processing in the interim period, which contributed 90% of its revenue.
Hence, it will temporarily stop production of soybean products thereafter, pending a review of the business operating environment.
United Food, however, assured it will continue its animal feed production business.
United Food closed down 0.1 cent or 0.5% to 18.4 cents, giving it a market capitalisation of $20.37 million.
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