Corporate: China is really not working out for water stocks this quarter
China is proving to be a bugbear for water companies, with Waterco (ASX:WAT) the latest to warn of a Sino-induced financial shock.
Waterco estimates full year profit will fall to $2.2m after saying in October last year it was expecting $3.3m.
“During the year, we experienced increased costs of production, and a significant slowdown in China’s economic conditions,” they explained today.
However, chairman and CEO Soon Sinn Goh did warn of a potential China shock, saying that was the only market where sales weren’t growing and speculated its cause to be the China-US trade war.
Waterco sells swimming pool and water treatment equipment in Asia-Pacific, North America and the UK.
At the start of April, China-focused Phoslock (ASX:PET) made a half-year loss in the last six months of calendar 2018 compared to profit in the same period the year before.
Austin Engineering (ASX:ANG) made a mistake yesterday: it said full year normalised profit (that’s profit with all of the one-offs stripped out) would only rise by 46 per cent. Today the services company humbled itself before the investing masses and said, we’re sorry, actually we plan on making a profit that is 52 per cent higher than last year.
The FY2019 normalised profit is expected to be between $7.9m and $9.3m, up from $6.1m last year. The error was due to including discontinued operations.
And both IOOF and Viburnum sold out of troubled tech company Uniti Wireless (ASX:UWL) yesterday. IOOF dropped its stake from 6.6 per cent to 5 per cent of the register. Virburnum, which was a top 20 shareholder when Uniti listed in February and quickly moved to 7.6 per cent, sold almost a quarter of its stake and dropped down just under the 5 per cent substantial shareholder threshold.
Uniti began drawing fire from the ASX almost immediately after it listed when it sacked the founders of the company and gave a reason the market operator simply didn’t believe.