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Global Invacom expects closure of Shanghai ops to incur up to US$10.5m in losses
MAINBOARD-LISTED Global Invacom will recognise one-off losses of between US$9.5 million and US$10.5 million in relation to the closure of its Shanghai operations, it said in response to a Singapore Exchange query on Tuesday.
In a FY2019 profit guidance filed with the bourse on Jan 15, it said it would be recognising non-recurring costs due to the cessation of its Shanghai manufacturing operations and subsequent relocation.
Its chief executive, Tony Taylor, previously told The Edge it expects to record a net loss for FY2019 from a profit of US$1.5 million for 2018. The group expects to announce its unaudited results for FY2019 in late February 2020.
The closure of its Shanghai operations is ongoing and will be completed around June 2020, added the global provider of satellite communications equipment.
Global Invacom's Shanghai operations was its main manufacturing location in Asia, accounting for 25 per cent of the group's global production as at end-2019.
The number of workers in China had decreased to about 300 as at end-2019 from 1,100 in 2014, but production costs had continued to rise, said Global Invacom.
It has relocated its manufacturing operations in China to the Philippines, which will account for almost half, or 45 per cent of its global manufacturing in 2020.
The group said it has partnered Philippine-based EMS Group, which will take over most production activities from Global Invacom's subsidiary in Shanghai.
Shares of Global Invacom closed unchanged at S$0.109 on Friday.