Notion Vtec Is Back in the Red Because to the Impact of the Lockdown and Increased Metal Costs

0 1

Notion VTec Bhd returned to the red in the third quarter ended June 30, 2021 (3QFY21), following three consecutive quarters of profit.

The manufacturer of hard disc drive (HDD) components previously declared a net profit of RM3.16 million in the preceding quarter.

According to a filing with Bursa Malaysia, the group’s machining business has been impacted by the movement control order, a 60 percent increase in metal prices, and a labour scarcity.

Additionally, the corporation claimed, its globe manufacturing division faced start-up costs as new lines were prepared for testing and commissioning.

Revenue increased 5.42 percent to RM89.2 million in the quarter, up from RM84.61 million in 2QFY21.

Notion VTec reported a larger net loss in 3QFY21 compared to RM10.86 million in 3QFY20, despite revenue increasing 122.71 percent from RM40.05 million.

The group’s net loss for the nine months ended June 30 increased to RM5.14 million from RM446,000 a year earlier. Revenue increased 38.48 percent year on year to RM239.16 million from RM172.71 million.

Notion VTec anticipates a rebound in its HDD, car, and electronics manufacturing service sectors following the completion of the second dosage vaccination campaign for personnel at the Klang and Johor factories, as well as market recovery in line with a better worldwide Covid-19 scenario.

Meanwhile, it stated that both its face mask and glove businesses are projected to do well in the coming years as Covid-19 transitions from pandemic to endemic status and demand for healthcare products remains relatively robust.

Three of the group’s nitrile glove lines are currently operational, with another three scheduled to begin production between October and December.

“Glove trade continues to be significantly more than glove production. The ASP (average selling price) of nitrile gloves has decreased significantly to between US$4 and US$5 each box of 100 gloves, although our supplier’s prices have decreased in line with market prices and decreased demand.

“As a high-volume commodities industry, the nitrile glove faces issues in maintaining product quality, funding and locating markets for the product, as well as risk management,” it stated.

On Wednesday, Notion VTec’s share price fell 0.5 sen or 0.83 percent to 60 sen, giving the company a market value of RM309 million.

Published by Zack Baharum

Leave A Reply

Your email address will not be published.