3SBio Inc. (NSDQ:
SSRX) announced a $2.7 million writedown as a consequence of
the US financial crisis. The company invested in $3 million of Floating Rate
Notes due January 21, 2009 that are subject to the credit of Lehman Brothers. As
a consequence of the Lehman Brothers bankruptcy, the notes have been given a
value of $300,000. The notes were credit default swaps issued by UBS AG, and
they are linked to credit of Lehman Brothers Holdings Inc.
3SBio said
that the rest of its 58.7 million RMB ($8.6 million) bond portfolio is in good
shape. It also noted a $99.5 million cash balance at the end of the third
quarter.
3SBio made the announcement as part of its preliminary Q3
unaudited results. The company said its Q3 revenues climbed 22% to 68.2 million
RMB ($10.0 million). However, because of the charge, net income dropped to 1.9
million RMB ($0.3 million), or $0.01 per ADS. In last year’s Q3, 3SBio reported
revenues of $7.5 million and net income of $3.2 million. 3SBio cautioned that
this year’s numbers, being preliminary, are subject to revision.
The
company reiterated its full-year 2008 revenue guidance of $34 to $35 million.
3SBio slipped 24 cents lower to $6 in today’s trading. It has traded in
a range between $5.16 and $20 over the past 12 months.
