Notion Vtec clinches RM338m gloves supply contract

by NUR HAZIQAH A MALEKA / pic by MUHD AMIN NAHARUL

NOTION Vtec Bhd through its wholly owned subsidiary, Notion Venture Sdn Bhd, has secured a sales contract to supply disposable nitrile examination gloves to an undisclosed European company for US$82.2 million or RM337.8 million.

In a filing yesterday, the company noted it would be looking at trading and manufacturing opportunities in disposable nitrile gloves beside the face masks business after its financial result’s announcement for the third quarter ended June 30, 2020 (3Q20).

“The supply is for two tranches of gloves to be delivered ex-works Malaysia and exported to Europe for meeting the medical needs in Covid-19 affected areas,” it stated in its filing yesterday.

Notion Vtec is primarily involved in design and volume production of high precision metal machining of hard disk drive (HDD) and consumer electronics.

The company ventured into the production of personal protective equipment and medical ventilator components due to the Covid-19 outbreak.

It has filed in July to be registered with the US Food and Drug Administration as a face masks manufacturer.

Its certification involves face masks produced by the company for both general public and healthcare personnel use, excluding the N95 respirators.

However, it was also reported that the company was in middle of submitting the N95 respirator samples for external laboratory approval, hoping to make it a part of the group’s long-term business.

Notion Vtec’s share price closed 14% or 14 sen higher at RM1.14 on the news, valuing the company at RM663.48 million.

Its three main segments are HDD, automotive braking system and engineered products such as camera lens, electronics manufacturing services and others.

According to its annual report for the financial year of 2019 (FY19), the group foresaw a challenging year and chose to shift from being a pure machinist to include fabrication works as a part of its core businesses.

It has also expected the automotive segment to grow following the addition of three new multinational customers, but also not entirely confident with the HDD segment and downward turn for cameras.

The group has budgeted a capital expenditure of RM25 million to cater to the increased demand and intends to achieve a revenue of RM320 million for FY20.

For its 3Q20, the company posted a net loss of RM10.85 million or loss per share of 2.15 sen a share against the previous year’s net profit of RM1.87 million or earnings per share of 0.37 sen.

Revenue for the period fell to RM40 million from RM56.4 million due to lower operations during the Movement Control Order period.

Notion Vtec, in its exchange filing, noted there was a recovery in June and expects orders from the electronics manufacturing services sector to be strong from 4Q onwards.