AEM uncovers inventory shortfall; expects deficit to negatively impact group’s FY2023 profitability
SEMICONDUCTOR equipment maker AEM Holdings : AWX 0% said on Sunday (Jan 14) that it has found a shortfall in the group’s inventories following an internal stock-taking exercise, which it expects to negatively impact the group’s profitability for FY2023.
As at end-September last year, the group’s inventories were stated to be worth S$358.6 million. This was shared in an investor update released on Nov 9, 2023.
However, a preliminary estimate suggests that the group’s inventories are anticipated to be 5 to 7 per cent lower than this figure, said AEM. It noted that the internal stock-taking exercise is still ongoing, and that it had taken into account “the ordinary and usual course of inventory movement”.
Based on an initial investigation into this issue, the group attributed the shortfall to “human error in transactions” with its enterprise resource planning system, which had occurred during the migration of production to the group’s Penang facility from Singapore.
These errors were not detected by the existing controls and processes that were in place, it added. As a result of its initial findings, it has begun a process to review its inventory and stock monitoring, as well as tracking processes and systems.
AEM expects the shortfall to have a negative impact on the group’s profitability for the financial year ended Dec 31, 2023. It will issue its unaudited condensed interim financial statements for the full year on or before Feb 29, 2024.
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It also clarified that its internal stock-taking exercise was an internal exercise undertaken by the group, and is not part of the audit of the company’s accounts by external auditors.
Shares of AEM closed flat at S$3.40 last Friday.
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