SHOUCHENG HOLDINGS LIMITED The board of directors of Shougang Concord International Enterprises Co. Ltd. announced that based on the unaudited consolidated management accounts of the company for the year ended 31 December 2015, the loss attributable to the Shareholders for the financial year ended 31 December 2015 is expected to increase significantly as compared with that for the year 2014. For the financial year ended 31 December 2015, the loss attributable to the Shareholders before accounting for further impairment losses which may be made by the Group and its major associates is expected to be approximately HKD 2,600 million, while that loss for the year 2014 was HKD 1,641 million.
Such increase was mainly attributable to the aggravated core operating loss of the Group accompanied by the impairment loss made by the Group on its investment in its major associate, Shougang Fushan Resources Group Limited, in the amount of HKD 395 million in the first half of year 2015 in view of the difficult coking coal market. The core operating loss of the Group before share of results of associates for the year ended 31 December 2015 is expected to be approximately HKD 1,800 million, whereas that loss for last year was HKD 1,263 million. Such increase is due to the deteriorating operating environment of the steel industry.
The problems of excessive production capacity and weak demand continue to seriously affect the industry resulting in extremely low selling price of steel products during the year 2015. The Group is still assessing on the recoverability of various assets, including investments in the associates and fixed assets, at the year end of 2015. Further impairment losses may be made by the Group if the recoverable amounts of such assets are less than their carrying amounts.
In addition, if further impairment losses are to be made by the Group's associates, the Group will share such losses in proportion to the Group's equity interests in the relevant associates. Thus, the attributable loss to the Shareholder for the financial year ended 31 December 2015 may further increase upon finalization of the audit of the Group and its associates.
