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China and Unites States trades battles have now started damaging the furniture market as international furniture seller OneAll reported dent in its operations after the companyâs major US-based customer refused orders.
Global outdoor furniture designer, manufacturer and distributor OneAll International Limited (ASX:1AL) provided revenue and earnings update for calendar year 2018 along with informing the timeline for completion of its integrated manufacturing, warehouse and office facility in Guangdong, China.
The company said China-US trade war has impacted its business resulting to loss of major US based customers. And because of this, the operator of Chinese furniture brand âGardenartâ, OneAll now expects CY2018 revenue to range between $49million and $51million, lower than previous guidance of $52.6 million but up 2.5%-6.7% on CY2017 revenue of $47.8 million. Net profit after tax (NPAT) is expected to be $8 million-$8.4 million versus previous guidance of $8.8 million.
OneAll expects more competition in Europe as Chinese manufacturers shift their focus away from the US while the dispute is ongoing. OneAll however confirmed that all US customers are maintaining their ordinary order levels and orders from customers in all other markets, including OneAllâs major European customers, have not been impacted.
Until there is greater clarity on the extent to which the trade dispute will impact on OneAllâs business in the US, OneAllâs Board has determined that it is prudent to conserve funds and temporarily suspend works on the expansion of the integrated manufacturing, warehouse and office facility.
Construction works that are currently underway will be completed with the foundations of the buildings to be finalized in December this year. This allows for the quick resumption of building works when the Board is confident the situation has stabilised. Meanwhile, the management confirmed its investors that OneAllâs dividend payout ratio of between 60%-80% will be maintained.
OneAll shares traded flat on 22 November 2018. However, 1AL stock last traded at $0.975 with PE of 14.360 x and market capitalization of $125.78 million. Over the past three months, the stock has shown marginal improvement of 3.72%, but in the past year to date, the stock has witnessed a negative performance change of 2.50%.
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