CHERVON (02285) announces its anticipated net profit for the year 2024 to be approximately $110-120 million, turning a loss into a profit compared to the previous year.

CHERVON (02285) announced that the group is expecting to achieve a net profit of approximately $110-120 million in 2024, compared to a net loss of approximately $37.2 million in 2023. Adjusted net profit (excluding non-recurring costs related to the positioning adjustment of the group's Steinfurt base in Germany) is expected to be around $135-145 million. The announcement stated that the expected increase in net profit is mainly driven by the following factors: - Revenue is expected to grow by around 25% to 30% compared to last year, benefiting from the end of the channel destocking cycle. Strong performance in terminal sales of the company's flagship brand EGO further boosted customer orders; under the impetus of the recovery in scale, business structure optimization, favorable factors such as exchange rates and raw material costs, the gross profit margin has improved; and continuous improvement in operational efficiency. As part of the group's strategic adjustment plan to ensure long-term competitiveness, the company's indirectly wholly-owned subsidiary FLEX-Elektrowerkzeuge GmbH plans to shut down its production at the Steinfurt base in Germany by the end of 2025. In the future, production will be relocated to China, while the Steinfurt base will continue to serve as FLEX's product and sales capability center in Europe. The positioning adjustment at the Steinfurt base is expected to save approximately $10 million in costs per year. According to ongoing discussions with the workers' committee, most of the non-recurring costs related to this adjustment will be recognized in the fourth quarter of 2024. This adjustment aligns with the group's broader strategy to optimize its global production layout. As the group continues to expand its capacity in Vietnam, the high-efficient production facilities in China may be better utilized to support the company's global business and improve overall production efficiency.