15th Jan 2020 12:10
(Alliance News) - Global Invacom Group Ltd said Wednesday although trading was in line with expectations, the upcoming closure and relocation of its site in Shanghai, China, will result in a net loss for 2019.
The satellite communications equipment provider said trading for 2019 was in line with expectations, and the group will remain operationally profitable, with over 40% of its revenues deriving from the Data Over Satellite division.
However, the company expects to report a net loss in 2019 compared to a net profit of USD1.5 million in 2018, due to the upcoming closure of the Shanghai site, one-off write offs, impairments and other charges.
The company decided to relocate Shanghai manufacturing operations to Philippines in the first half of 2020. The decision was driven by increased production costs in China and US tariffs on Chinese products, the company said.
Following the realignment of Asian manufacturing operations, the company expects its operations and financial performance in 2020 to improve on 2019.
The company said it is now focused on addressing two distinct end markets, the Direct-To-Home and the Data Over Satellite markets.
Tony Taylor, executive chair, said: "We firmly believe that transition of our production facility to the Philippines will be highly beneficial and will enable us to continue bringing cutting edge, essential products to market and respond to the ever-increasing demand for data and connectivity globally."
Back in August the company had said in the six months to June 30, revenue was up 30% to USD71.9 million from USD55.4 million and pretax profit rose sharply to USD2.1 million from USD796,000.
The company will announce in annual results on January 27.
Global Invacom shares were down 4.8% in London at 0.14 pence each on Wednesday.
By Loreta Juodagalvyte; [email protected]
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