Kappa owner turns from profit to loss

China Dongxiang (3818), which owns sportswear brand Kappa in China and Macau, posted a net loss of 1.75 billion yuan (HK$2.05 billion) in the year ended March, compared to a profit of 1.81 billion yuan a year ago.

Revenue decreased by 2.7 percent to 1.92 billion yuan in 2022 from 1.97 billion yuan in 2021 due to the Covid pandemic, which saw the number of customers decline.

The gross profit of the group before provision for impairment of inventories decreased to 1.23 billion yuan in 2022 from 1.29 billion yuan in 2021 due to an increase in sale discounts from promotion and clearance sales activities under the impact of the pandemic.

The operating loss of the group was 1.75 billion yuan in 2022 from a profit of 2.07 billion yuan in 2021.

The basic loss per share was 29.79 fens in 2022, from earnings per share of 30.88 fens in 2021.

The company is facing financial risk factors including interest rates risk from short-term borrowing with variable rates, it said.