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Procurri expects 'substantially weaker' performance in H1 2020
PROCURRI Corporation on Tuesday said it expects to report a "substantially weaker performance" for the first half this year compared to a year ago.
This is mainly due to the impact from the Covid-19 pandemic, and a "slow start" this year after discussions to sell its third-party maintenance business to Park Place Technologies fizzled out, the mainboard-listed company said.
In January this year, Procurri announced that the possible transaction with data centre support services specialist Park Place was called off as it "proved challenging" to carve out that business segment "at the right price and deal structure".
Deal talks had begun in November, with Park Place making an indicative cash offer of US$115 million or S$0.55 per share for all of the assets that comprise Procurri's third-party hardware maintenance business, subject to due diligence.
Procurri subsequently decided to continue its focus on developing all three of its business segments comprising third-party maintenance, IT hardware resale, and IT asset distribution, it said in a bourse filing on Tuesday.
Among other factors, the company's business for the first half this year was negatively impacted by customers holding back on their purchasing decisions amid the pandemic, Procurri said.
On May 28, Procurri said that two of its US subsidiaries, Procurri LLC and Rockland Congruity LLC, were granted financial aid of about US$1.6 million and US$1.8 million respectively under the US Paycheck Protection Programme.
If these subsidiaries met a certain set of criteria, these loans may be written off and will be recognised as "other income", thereby softening the decline in net profit for H1 2020, Procurri said.
The company said further details of its performance will be made available when it announces its financial results for the first half this year on or around Aug 5.
Procurri shares closed at 31 Singapore cents on Tuesday, down 0.5 cent or 1.6 per cent, before the profit guidance was issued.