Hmmm, isn't there still a ray of hope… kot?
Shares of ATA IMS Bhd faced selling pressure on Tuesday after the group said it projected a 40% drop in earnings for the financial year ending March 31, 2023 (FY23) after Dyson terminated their contracts.
The counter was down 14 sen or 26.92% at 38 sen and was the biggest loser on Tuesday morning.
The counter also saw 582.32 million shares change hands which is the most actively traded stock.
The counter fell 82.68% from RM2.57 since Nov. 12 when it announced a net loss of RM11.7 million in the third quarter ended Sept. 30, 2021 (3QFY21) while RM2.56 billion in market capitalization was eliminated in three weeks.
ATA IMS stated in an exchange filing on Monday that cost -cutting measures will be taken in response to the termination of its contract with Dyson and the group is working toward maintaining profitability by reducing costs to ensure sustainability.
Dyson is the company’s largest customer contributing 80% of the company’s revenue.
ATA IMS further added, termination of contact by major customers did not affect its operations except for termination of tenancy and organization -wide cost reduction training and restructuring of bank loans for redundant facilities as the company did not have to hold high stock levels as before for customer orders.
The impact of movement control orders and staff shortages has made the company’s estimated revenue for FY22 decrease by 30% compared to FY21.
Meanwhile, in a note released by AmInvestment Bank Research on Tuesday maintained a “sell” on the IMS ATA and revised its fair value to 30 sen from 56 sen and they also maintained a cautious stance on the outlook for the IMS ATA.
As such, it does not share the company’s post -June 2022 optimistic guidance on a pre -tax profit margin of 5%.
It maintained its loss forecast for FY22 to FY24 reflecting only organic growth from the group’s remaining existing customers and coupled with several small new orders to be secured in FY23 and FY24 at a gross profit margin of 2% to 2.5% in FY23 to FY24 versus 4.4% in the first half ended 30 Sept 2021 or 1HFY22 of diseconomic scale.
