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Jiangsu Lanfeng Biochemical Co., Ltd. (Jiangsu Lanfeng) made an announcement to revise the prediction on the full-year 2018 financial figures, “The net loss would reach USD88.9-133.4 million in 2018,” said the announcement. This prediction is a result of the preliminary estimate of the financial department of Jiangsu Lanfeng and has not yet been audited by the certified public accountant.
Here are reasons summed up in the announcement for such a loss.
1. The fully owned subsidiary Ark Pha. Ltd., impacted by the pharmaceutical policies and the changes of market conditions, had the below expectation performance. At the end of this fiscal year, Jiangsu Lanfeng primarily tested the impairment of this subsidiary and found that there was an indication about goodwill impairment. Hence, the company counted in this impairment for cautiousness.
2. Regarding the agrochemical business, some production facilities were operated at lower rates, impacted by the increasingly strict environmental policies. The company, in accordance with the accounting principles, prepared for the impairment of part of such fixed assets.
3. There was a production suspension loss caused by environmental policies, along with increases in costs for environmental treatment.