With the RM47.5mil that it has raised from the IPO exercise, Notion VTec Bhd has spent RM25mil to set up a new plant in Klang to expand capacity catering for the rising demand.
KUALA LUMPUR: Precision component maker Notion VTEC Bhd
is acquiring new factory space and ordering additional computer numeric control machines (CNCs) to try to make up for the production loss due to last month’s fire.
The group, whose main manufacturing plant in Klang caught fire on Oct 20 that affected more than 552 CNCs and work-in-progress goods, has ordered more than 290 CNCs worth about RM75mil.
It is also buying a 60,000 sq ft built-up ready-to-move-in factory on a 3.5-acre freehold land in Ayutthaya, Thailand, for 73 million baht (RM9.2mil), it told Bursa Malaysia.
“We have also rented another two factories in Klang to provide additional space for recovery as well as production space,” Notion VTec said in its latest quarterly financial report.
It said it had redistributed work to use whatever spare capacity available within the group’s factories while awaiting the arrival of the new machines and doubled up the work wherever possible to meet the production lost.
Notion VTec said tenders had been called for the reinstatement of the Klang factory building that would be removed and rebuilt.
The company, which has previously said it had insurance coverage of RM350mil for property damage and RM217mil for business interruption of up to 18 months, is still in the process of computing the claim amount and expects to finalise it “in the short months ahead.”
Due to the need to conserve cash in light of the fire incident, the board has, however, decided to defer any dividend payment for this quarter and next quarter until things are back to normal (Q4 FY16: 1 sen). Still, for the entire year, total dividend was higher at 3 sen versus 1 sen in the preceding year.
Notion VTec, which will only be impairing the fire loss in the first quarter of financial year 2018, nonetheless reported weaker results in the fourth quarter (Q4) ended Sept 30, 2017, compared with a year earlier.
The company swung to a net loss of RM1.04mil in the quarter under review from a profit of RM4.91mil previously despite a 13.2% rise in revenue to RM67.85mil.
This was due to higher aluminium prices, lower US dollar exchange rate and lower contribution from other operating income, it said.
For the entire financial year ended Sept 30, 2017, Notion still managed to post a strong 122% profit growth to RM12.6mil while revenue swelled 18% to RM272.19mil.
For FY18, Notion VTec said the auto braking plungers business was expected to register double-digit growth, especially in electric and hybrid cars.
The company also plans to take to production for the lifestyle consumer electronics segment “as soon as possible” as it is a high volume product.
Notion VTec disclosed that it had made inroads to an unnamed major multinational production equipment maker in the semi-conductor space which had good prospects.
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