South-South Resources (01229) issued a profit warning. It is expected that the medium-term loss will not be more than HK$10 million to turn profit into loss year over year

Zhitong Finance App News, Nanan Resources (01229) announced that the Group expects to make a profit of approximately HK$47.1 million in the six months ending September 30, 2024 (mid-2024) and turn into a loss of no more than HK$10 million for the six months ending September 30, 2025 (mid-2025). This loss is mainly due to the fair value change loss of the HK$200 million zero-coupon convertible bond issued by the Company in 2008 (due to expire on March 13, 2026). The bond was designated as a financial liability at fair value and treated within profit and loss in mid-2025, amounting to approximately HK$31.7 million. Other factors that had a net impact include net exchange losses, which were net exchange gains in mid-2024, and a decrease in gross profit, mainly due to an increase in sales costs and a decrease in the average unit selling price of the coal mining business.