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Ronnie Xue, CEO of QEX Logistics, with a staff member.
Cross-border logistics company QEX Logistics has warned shareholders that the disappearance of goods from a Chinese warehouse could affect its finances.
QEX told NZX on Wednesday that around $ 4 million in inventory had been removed from its China Custom insured customs warehouse in Shanghai without company authorization.
At this time, the company said it believed the goods had been stolen.
” Currently, the company is collaborating with its Shanghai staff, its China-based auditors, Chinese Customs, the owner, local police and diplomatic channels to determine the exact circumstances that led to the removal of these products from the stores. company facilities in Shanghai. ”
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QEX said the final value of the missing inventory was still being assessed and it was investigating whether the goods could be recovered or whether it had any recourse against third parties.
Shares of QEX fell nearly 15 percent to 40 cents in mid-morning trading.
QEX has been on the NZX main board for two years, focusing largely on shipping baby formulas and health supplements from New Zealand to China.
In May it announced a $ 3 million share purchase plan to expand its operations to Australia.
Last year, the company reported a $ 3.3 million increase in revenue to $ 62.7 million.
But in September, the company warned that its margins on infant formula had fallen as border restrictions reduced orders from “daigous” or Chinese intermediaries.
The company said it was shifting to selling directly from its Chinese warehouse, as Chinese consumers began to avoid imported products for fear that they would spread Covid-19.
Covid had also generated better margins in air freight for its international parcel service, particularly outside of its fledgling Australian operation.
QEX said that revenue for the first four months of its financial year had fallen to $ 12.4 million, nearly a third less than in the same period a year earlier. You had a pre-tax net loss of $ 930,000 for the year to date.
Now, QEX is concerned that missing assets will affect its bottom line. The company told the NZX that if it could not recover the lost inventory, it could affect the net income as well as the banking arrangements of its subsidiary.
The company met with its bankers on Tuesday to seek an exemption and would release more details “once it has quantified the financial impact of the loss,” it said.
