InnoTek is informing shareholders that following a preliminary review of its financial results, it expects to report a net loss for 1HFY2022 ended June.
In its July 14 announcement, the group is attributing its loss to increased operating costs as labour and manufacturing costs have risen, while disruptions to the global supply chain have resulted in higher cost of raw materials; and prolonged movement restrictions imposed within China as part of its “Dynamic Zero” Covid-19 policy. These restrictions severely impacted the group’s major customers’ businesses in China, which in turn hampered the its revenue growth in 1HFY2022.
To recap, InnoTek recorded earnings of $4.3 million in 2HFY2021, representing a 57.8% y-o-y decline from $10.1 million. For its FY2021 period, earnings were 17.0% lower y-o-y at $11.5 million. Revenue was also registered a decline for the 2HFY2021 and FY2021 periods.
The lacklustre performance for both periods, were mainly attributed to lockdown measures imposed during the height of the pandemic, global shortage of chips and other electrical components, as well as the global shipping congestion.
When the group previously released its FY2021 results on Feb 26, it admits that operating environment has become more challenging, amid slower economic growth in China. While it expects these challenges to ease in 2H2022, some of its current focus to capture growth include the electric vehicle (EV) sector.
The group plans to release its 1HFY2022 results in the middle of August, when further details on the group’s performance and forward strategies will be disclosed. In the meantime, the group is advising shareholders to exercise caution when dealing with its shares.
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Shares in InnoTek closed 3.0% higher on July 14 at 52 cents.
