KUALA LUMPUR: Precision component maker Notion VTEC Bhd said it will provide new earnings guidance in the next quarter after business disruptions caused by the novel coronavirus (Covid-19) pandemic pushed the company into the red.
Notion Vtec, in a filing with Bursa Malaysia today, said it made a net loss of RM3.8mil in the second quarter ended March 31.
Overall sales during the quarter were down 11%.
It warned that the worst is yet to come.
"April and May months performance is sharply down due to the extended MCO and only the hard disc drive (HDD) sector held up well but we expect June to recover from both Automotive and electronic manufacturing service (EMS) sectors albeit at a lower level," it said.
"Third quarter results will be negative reflecting the true state of business disruption."
Going forward, the company is venturing into the production of surgical face mask, face mask filter barrier, PP polypropylene meltblown fabric and later the inner and outer layers of face mask, PP polypropylene spunbond fabric and also the PP resins needed for the fabric production.
"The business will kickstart in the month of June and gradually increase in scale as we develop the market and iron out the kinks of manufacture," it said.
The Group will provide the new guidance for FY2020 and 2021 in the next quarter when the production and business is made clearer.
The total investment thus far is RM7.5mil in capex with 4 lines of face mask production of output 10 million face mask per month, 5 lines of PP MB production of 50 tons each month which is sufficient for 50 million face mask production a month.
"The excess of PP MB will be sold to other face mask makers locally and overseas. We have not yet invested in PP SB machinery as yet but soon," it said.
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