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Nico Steel swings into the red with US$283,000 H1 loss
METALS supplier Nico Steel posted a net loss of US$283,000 for its first half of fiscal 2020, versus a net profit of US$121,000 a year ago mainly due to uncertainties arising from the US-China trade war and fluctuations in commodity prices and currencies.
For the six months ended Aug 31, 2019, loss per share was 0.006 US cent compared with an earnings per share of 0.005 US cent a year ago.
Revenue dipped 11 per cent to US$7.1 million from US$8 million mainly due to lower demand for the group’s proprietary Nico brand of metal alloys.
These higher margin proprietary metal alloys are mainly for high-end electronics and mobile devices of global market leaders, Nico Steel said.
No dividend was declared.
Despite lower earnings, the group is cautiously optimistic going forward as seasonal demand for electronics usually picks up in the second half of the year, it said.
Monthly tonnage of secured orders required by its customers is picking up, but Nico Steel remains cautious for the financial year amid the global economic slowdown.
"We faced a lot of disruptions in our project pipeline with our customers who are market leaders in the mobile communications and industrial sectors as the trade dispute intensified," said Danny Tan, executive chairman and president of Nico Steel.
"While we did not lose any customer and we continue to work with them on the metallurgical and material solutions for their devices, the uncertainties arising from trade tariffs as well as the delays in the rollout of 5G mobile networks affected the progress and intended timelines were extended. This inevitably had a negative impact on us as everyone took a wait-and-see approach and become more price-sensitive."
Watch-listed Nico Steel's shares closed up S$0.001 or 33.3 per cent at S$0.004 on Wednesday.