The Board of Directors of Santak Holdings Limited considers it appropriate to issue profit guidance, ahead of the announcement of the financial results of the Company and its subsidiaries for the financial year ended 30 June 2014.
Following a preliminary assessment of the financial results for FY2014, the Group is expected to, as compared to previous year, report materially lower revenue and a loss before taxation.
The turnover for second half of FY2014 (2H2014) is expected to be significantly lower than first half of FY2014 (1H2014). The Group is expected to report a loss before taxation for 2H2014 compared to a profit before taxation for 1H2014. The above is mainly attributable to substantially weaker demand for our existing precision machined component products ahead of transition to new product models which encountered delays in our mass production ramp up in 2H2014. Further, the Group also incurred substantial costs for the qualification and development process of other new precision machined component projects during 2H2014.
Further details of the Group’s results will be made available when the Company announces its unaudited consolidated financial results for FY2014, which is expected to be before end August 2014.
http://infopub.sgx.com/Apps?A=COW_CorpAnnouncement_Content&B=AnnouncementLast3MonthsSecurity&F=OOHKF5D9J01IWJN1&H=3b34f3af597d26d62cc64307318b1c0ccdd423973184202d17f78a4fd56c0709&fileId=Santak_Profit_Guidance.pdf
Our view:
We are surprised Santak issued a net loss profit guidance although we already estimated its 2H14 to be weaker than its 1H14. While the group is expected to release its results in end August, we put our estimates and recommendation under review now.