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Non-renewal of contract likely to dent Artivision Technologies' earnings

ARTIVISION Technologies Ltd on Wednesday said that its subsidiary, Colibri Assembly (Thailand) Co Ltd, will not renew the exclusive agreement with its only customer to manufacture disk drive filter technology products when the deal expires in March 2018.

In a filing to the bourse operator, the Catalist-listed company said that the customer is a wholly owned subsidiary of a US-based multinational corporation.

"Since the beginning of 2017, due to the slowdown in the hard disk drive industry, Colibri's revenue had declined significantly, in turn affecting its profitability adversely. In the past months, Colibri was engaged in discussions with the customer to explore the possibility of increasing its revenue and margin, but was unable to reach an agreement with the customer."

It was then decided that Colibri would not renew the contract when it expires.

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The firm said that the non-renewal of the agreement is expected to have a negative impact on the net tangible assets per share and earnings per share of the group for the current financial year ending March 31, 2018.

Artivision Technologies added that it is exploring other business opportunities for the group, and that it would make the necessary announcements as and when there is subsequent material development.

The stock closed up 0.3 Singapore cent to end at S$0.017 before the filing.