Friday, October 14, 2011

Eng Tek: Thai floods to have negative impact

KUALA LUMPUR: ENG TEKNOLOGI HOLDINGS BHD [] has said that the floods in Thailand that have forced the temporary shutdown of its operations in that country will have a negative impact on its revenue for the financial year ending Dec 31, 2011.

It said on Thursday, Oct 13 that for the financial year ended Dec 31, 2010, the Thai operations contributed approximately 40% to its revenue.

'Nevertheless the quantum of the impact cannot be determined at this juncture,' it said.

On Oct 11, Eng Tek said that the floods in Ayuththaya had resulted in the shutdown since Oct 8 of Engtek (Thailand) Co Ltd and that the Thai authorities had issued an evacuation order for the industrial zone in which Altum Precision Co Ltd. was located although the area has yet to be affected by the flood waters.

Eng Tek said it was aware that several of the group's key customers and suppliers had also been affected by the floods and this has resulted in significant disruption to the supply chain of key hard disk drive components.

The company said it was currently unable to ascertain the amount of damage and loss to property, plant and equipment or to quantify the exact financial impact because the water level has not subsided and there was very limited access to these facilities.

'While management believes there is adequate insurance to cover losses arising from the replacement of affected assets, it is also trying to assess the floods' impact on the group's working capital requirements and any resultant losses.

'The company will provide further updates when there is more clarity on the flood situation in Thailand,' it said.

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