Profit Warnings for AsianLogic
By: R. Kingsley, Friday November 28th 2008
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AsianLogic recently announced that the current economic slowdown both globally and in Asia would be likely to impact gaming in the Asia-Pacific region. As this region is the company's principal market, this has led to a warning that AsianLogic will be unable to meet its market forecasts for the year 2008 and as a result, shares in AsianLogic fell by almost 14% in early morning trading in London. To be precise AIM:ALOG, the AsianLogic shares fell 13.70% down to 31.50 pence in London following the profit warning announcements.
Because of the generally poor investment market conditions, the year of 2008 saw more difficulties than anticipated in the areas of acquisitions and corporate finance for AsianLogic. In order to minimize the effects of the economic slowdown for AsianLogic, as much as possible, the company has initiated a number of actions as part of a risk management protocol. While sensible for AsianLogic in the medium to long term, these initiatives will have an impact on trading in 2008. Due to this, AsianLogic expects their full year pre tax profits to not increase significantly from the $7.05 million that it achieved in H1 2008.
AsianLogic had been planning to launch a number of land based gaming initiatives in 2008 and these have now been postponed until 2009 so that the company can guarantee that their maximum commercial benefit is achieved from 2009 onwards. The company's investment fund is also due to launch in the first quarter of 2009 and they are expecting to see revenues from operations in China beginning in early 2009. As such, the board of AsianLogic is in fact predicting significant opportunities for 2009 and ensures their customers not to be concerned by the 2008 prediction.
In fact, the AsianLogic management team has ensured the public that the shortfall that they experienced in 2008 is once-off in nature and is due to the current economic climate. They maintain that this in no way reflects the long term development potential that is expected for AsianLogic. Their management spokesperson stated that their development potential "continues to be profitable, highly cash generative and holds a strong balance sheet."
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