Medtecs International Corporation warns that it is likely to incur a “significant net loss” for 2HFY2022, as the producer of personal protective equipment got to make inventory provisions of some US$12 million.
According to Medtecs International, the continued easing of the Covid-19 restrictions has led to lower demand and average selling price of these products globally.
“Based on our market survey, including feedback from our existing customers, we have assessed that there is a general global decline in ASPs and demand for PPE.
“We deem it prudent to recognize the impact of these market factors in the realizability of the group’s inventories,” the company says.
Nonetheless, Medtecs says its overall financial position, including cash flow and operations are in a “good and stable condition”.
For example, as announced on Oct 5, Resilient Medical, its joint venture company in Cambodia, has completed construction of its medical-grade nitrile glove factory in Cambodia and commenced mass production in the 4th quarter of 2022.
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“Supply chain disruptions in China had resulted in the delayed commencement of mass production, which was initially expected to commence in the 3rd quarter of 2022.
Medtecs says it has also started promoting and selling handheld ultrasound devices in the Philippines.
“We are also exploring new product offerings and markets in order to stay competitive and meet the evolving needs of our customers.
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“The group will focus on pursuing strategic development to future-proof its market position and sustainable long-term growth,” the company says.
Medtecs says it will report its FY2022 earnings by March 1 2023.
Medtecs shares closed at 17 cents on Jan 19, down 1.79% for the day, and down 48.44% over the past year.