PETALING JAYA: Notion Vtec Bhd posted a net loss of RM3.76 million for the second quarter ended March 31, 2020 from a net loss of RM4.19 million a year ago, mainly attributable to the lower revenue arising from the Covid-19 pandemic which caused disruption to businesses globally.
Its revenue jumped 17.45% to RM62.32 million compared with RM53.06 million previously.
For the six months period, the group posted a net profit of RM10.41 million compared with a net loss of RM6.36 million in the previous year’s corresponding quarter, while revenue dropped 1.92% to RM132.66 million from RM116.4 million.
The group said Chinese manufacturers form the largest hub of supply chain for the electrical & electronics sector besides other important industrial and metals sectors. Once this supply chain was disrupted, there was utter chaos and immediate global search for alternative sources and change of suppliers from other hubs but the delays and capacity to replace this vital Chinese supply chain was an impossible task.
“The missing of a component or a surface treatment process or delays in shipment or inadequate inventories by any supplier to the final assembler will result in an incomplete production of the end product. Even if you have the capacity to manufacture a certain component but a disruption of other suppliers can cause your components to be held back,“ Notion Vtec said in its Bursa filing.
On its outlook for Q3 (April – June), Notion Vtec said the April and May performance is sharply down due to the extended MCO and only the HDD sector held up well, but expects June to recover from both automotive and EMS sectors albeit at a lower level.
“The safety of our workers, staff and management took centre stage as we implemented work from home for non-essential personnel, temperature checking, sanitising of hands, periodic disinfection and social distancing. Q3 results will be negative reflecting the true state of business disruption.”
On its outlook for Q4 (July-Sept), the group noted that China has reopened earlier and the virus seems well under control and the supply chain has recovered.
The group has in March made a strategic move into the healthcare sector in the production of surgical/medical face mask, production of the face mask filter barrier, PP polypropylene meltblown (MB) fabric and later the inner and outer layers of face mask, PP polypropylene spunbond (SB) fabric and also the PP resins needed for the fabric production.
“The business will kickstart in June and gradually increase in scale as we develop the market and iron out the kinks of manufacture.
The group will provide the new guidance for FY2020 and 2021 in the next quarter when the production and business is made clearer, it said.
