Medtecs to post H1 loss on fewer orders, lower prices of PPE and masks

PROTECTIVE gear manufacturer Medtecs International is bracing for a loss for the first half of 2022 ended June, the company announced on Wednesday (Jul 20). 

Medtecs said the red ink it expects for the period is due primarily to fewer orders from its original equipment manufacturing clients, as well as a reduction in demand and average selling prices of facemasks and personal protective equipment (PPE) globally. 

Sales in Taiwan and the Philippines and e-commerce sales remained steady during H1, the company noted. 

However, Medtecs booked additional marketing, advertising and distribution expenses to promote the ‘Medtecs’ brand and own-brand products and grow its e-commerce business. 

There were also additional expenses incurred in the setting up of the nitrile glove factory in Cambodia, which is being built via the group’s joint-venture company, Resilient Medical.

Due to the supply chain disruptions in China, the expected completion date for the nitrile glove factory has been delayed by 3 months. However, Medtecs said it continues to actively catch up on milestone completion dates, with mass production expected to commence in Q3 2022. 

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Medtecs’ board of directors said the delay in the completion of the nitrile glove factory is not expected to have a material adverse impact on the overall financial position of the company, which “remains healthy”. 

Medtecs said it continues to engage with group purchasing organisations, institutional clients and government agencies to promote and distribute its products. The company will also leverage its increased marketing presence to build up its e-commerce business and create a stable business-to-consumer customer base.

“We are also working on a number of stock-piling projects for military uniforms and protective solutions in the Philippines as the world transitions to the post-Covid-19 era,” it added. 

Medtecs will announce its H1 financial results on or before Aug 15. 

Shares of Medtecs closed on Wednesday at S$0.205, up 2.5 per cent or S$0.005.