PROTECTIVE gear manufacturer Medtecs International on Tuesday (Feb 28) posted a net loss of US$28.5 million for the financial year 2022, compared to a net profit of US$17.3 million in FY2021. 

The company attributed the weaker bottomline showing to lower demand for its products, weaker margins, as well as an increase in inventory provisions for FY2022 amounting to US$11.5 million. 

Revenue for the year fell 60.5 per cent to US$56.9 million from US$144.2 million due to lower sales from a decline in global demand and average selling price of personal protective equipment (PPE) and face masks, as well as fewer orders from existing clients on the back of inventory oversupply and non-recurring orders from FY2021. 

“Such global trends and a decrease in recorded Covid-19 cases and easing of Covid-19 prevention measures in most countries have significantly affected the buying habits of most of our key customers, which has in turn affected our revenues and margins,” the company said. 

To mitigate the impact, Medtecs said it has continued with its marketing effort to increase its e-commerce presence with the hope to engage more customers with existing and new products such as home healthcare items. 

Segmentally, revenue from the original product manufacturing division fell 69.5 per cent to US$36 million in FY2022 from US$117.9 million due to lower sales of PPE and face masks.

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Revenue from the hospital services division slipped 4.4 per cent to US$14.3 million due to decreased linen consumption in Taiwan and the Philippines.

Medtecs said it recognises the challenges posed by the decline in global demand, coupled with lower orders. 

“In response, we are enhancing our supply chain management to ensure we can respond quickly to changes in demand. We are improving our forecasting and demand planning, optimising inventory levels, and working more closely with suppliers and distributors,” said the group. 

Shares of Medtecs fell 9 per cent or S$0.012 to close at S$0.121 on Tuesday.