UK-based Tekmar Group has said that China’s response to the Covid-19 outbreak, including the restriction of travel, has affected its performance.
Its earnings for the year ending 31 March will not be as high as expected. This comes as the outbreak has delayed all its Chinese projects.
The virus has also delayed shipments of supplies from China. The country has made no announcements about when it will lift travel restrictions.
Tekmar’s board now anticipates that its earnings in the financial year (FY) 2020 will be in line with FY 2019.
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According to Tekmar, the supply of components from China has ceased until further notice. This prompted it to source replacement components from Europe.
It said that any resulting delays would not affect contractual delivery schedules for clients. However, it will affect the timing of revenue recognition and margins for the delayed projects.
The death toll from the virus has reached 1,873, with 98 new deaths in China. The number of cases of infection has increased to 73,000 globally as of the end of 17 February. The total number of recoveries stood at 12,552.
Meanwhile, the company’s office in Shanghai was officially shut down in an effort to combat the spread of coronavirus Covid-19.
Tekmar Group chairman Alasdair MacDonald said: “The disruption caused by the outbreak of the coronavirus on the group’s activities and performance has been unpredictable and rapid, impacting the group materially in our crucial, heavily weighted Q4 period.
“With the situation in China and the surrounding APAC countries evolving, we are not yet able to evaluate the full impact of the virus on FY 2021 and will provide further updates as necessary.”
In August 2018, Tekmar Group signed an agreement to acquire Subsea Innovation in a cash and stock transaction valued at £4m.