Courier giant SF Holding reported heavy losses for the first quarter due to the soaring cost of expanding its new businesses amid fierce competition, reported Caixin.
The company booked a net loss of RMB 989 million ($152.3 million) on revenue of RMB 42.6 billion in the first three months this year, according to its latest earnings report released Thursday. SF Holding reported RMB 907 million in net profit for the same period a year ago.
The reading marked SF Holding’s first quarterly loss since its Shenzhen listing in February 2017. On April 8, the company warned investors that it expected a quarterly loss of about RMB 900 million to RMB 1.1 billion. Shares of SF Holding dropped by the 10% daily limit when the market opened the next day, automatically triggering a trading suspension.
SF Holding Chairman Wang Wei said in a meeting on April 9 that he attributed the losses to the slower growth of the company’s core business of time-sensitive express delivery, big spending to develop its new e-commerce courier business and high labor costs during the Lunar New Year holiday.