Mid-sized contractor Louis XIII Holdings (0577), which previously traded under the name Paul Y Engineering, has warned that it expects to make a loss for the current financial year ending March 2014.
“Such loss was mainly caused by the new business segment in hotel under development, which has not yet commenced business and has no revenue but with budgeted expenses,” the company said in a stock exchange notice on Monday.
However the construction business segment, which comprises the Paul Y family of construction companies, was expected to record a profit.
The company is hoping that its exclusive luxury hotel and entertainment complex in Cotai Strip in Macau, currently under construction, will generate strong cash flows to supplement the construction business.
Last February, the company raised HK$3.2 billion by way of placement of shares and convertible bonds to fund the development of the Macau hotel project.
In its annual results for the year ending March 2013 released Sunday, the profit attributable to shareholders plunged 42 percent year-on-year to only HK$18 million due partly to a 67 percent drop in “other income” and a 19 percent increase in administrative costs.
This was despite turnover surging 58 percent year-on-year to HK$6.82 billion.
By geographical location, Hong Kong accounted for 58 percent of turnover at HK$3.94 billion while Macau was second with HK$2.49 billion or 37 percent of turnover.
During the year, it secured new contracts worth about HK$13.2 billion in total with projects such as the piling and main contract works for Studio City in Macau and the Pat Heung Depot modification works for the Shatin to Central Link.
Separately Construction Post has learned that veteran former company executive at Paul Y-ITC Construction, Peter Walder, has rejoined the Paul Y family albeit as commercial director at Louis XIII.
Paul Y-ITC was the direct predecessor of Paul Y Engineering.
After leaving Paul Y-ITC in 2003, Walder worked in the booming construction industry in the Middle East at the time in addition to working at a few consulting companies.