Complying with Malaysia’s restricted movement order, at least 21 firms listed on the Singapore Exchange (SGX) have temporarily shut down their retail shops, factories, and offices in the country.
The movement restriction order, which began on Wednesday (18 March) will continue until the end of March, in an effort to contain the spread of COVID-19 in Malaysia.
According to bourse filings since Tuesday (17 March), affected companies include manufacturers, miners, and developers. Most of them are still assessing the financial impact of the temporary shutdown.
Companies such as Eindec Corp, a Catalist-listed cleanroom equipment and air-purifier maker, has already foreseen some impact. With the company’s only plant in Johor Bahru closed for two weeks, it expects “material impact” on its half-year financial results on 30 June this year. The plant manufactures ventilation and air-conditioning equipment as well as cleanroom and heating equipment.
Its Johor Bahru factory has also been closed by door manufacturer KLW Holdings until the end of this month, and the company stated that its scheduled order shipments will be affected. According to the firm, a prolonged period of closure and extension will cause negative impact on its financial position and cash flow because fixed costs, like wages, will still need to be paid during the closure.
As for Hatten Land, not only has it temporarily closed its sales galleries and offices in Malaysia, construction works for ongoing projects have also been ceased.
Catalist-listed real estate developer stated in a filing on Wednesday that “the order has further exacerbated the already challenging business and operational environment in Malaysia”. The board will be issuing a profit guidance note even though it is unable to determine the extent of the impact at this point in time: “The group expects that its financial results will be adversely impacted for the third quarter ending Mar 31, 2020, and the full year ending Jun 30, 2020, as compared to the corresponding periods in the previous year.”
Dynamic Colours’ wholly owned subsidiary in Malaysia presently operates production facilities for its polyethene packaging business and resin compounding business segments, the company stated.
This period’s delivery and production plans at the subsidiary will be adversely affected by the shutdown, as stated in the company’s bourse filing: “The company will inform its customers about feasible remedies and timing to resume the performance of our obligations once this force majeure event ceases.”
However, businesses classified under essential services have been permitted to continue operations.
Speaking to Channel New Asia (CNA), mainboard-listed glove maker Riverstone Holdings said: “The manufacturing of medical gloves and face masks has been deemed by the authorities as an essential industry, as healthcare practitioners around the world continue to grapple with the virus.”
Riverstone Holdings is a producer of nitrile and natural rubber cleanroom gloves which are used in highly controlled environments, alongside premium-nitrile gloves utilised in the healthcare sector. The company also manufactures face masks and finger cots with four of its six production plants in Malaysia.
Another company, Micro-Mechanics has also been permitted to continue its factory operation in Penang. It mainly serves customers in Malaysia with around 16 per cent of total revenue in the six months ending on 31 December in 2019.
Micro-Mechanics stated in its filing on Thursday: “As semiconductors are listed on the government’s ‘List of Products that is part of the Supply Chain of Essential Goods Supply Chain for Exemption from the Restriction of Movement’, the group can continue its operations in Penang at a minimal level.”
Meanwhile, the company’s factory in the United States is running “minimum basic operations” in the midst of public health officers within six Bay Area counties in California enforcing a legal order for residents to stay at home for three weeks beginning from 17 March.
Although this legal order “limits activity, travel, and business functions to only the most essential needs”, the company’s factory in Santa Clara has been exempted from the order. A plan has been introduced to guarantee that the factory “continues to run with reduced personnel to maintain basic and essential operations”.
Customers in other markets are not expected to be affected by the reduced operations at the two factories because other factories in China, Singapore, and the Philippines will also serve those markets.
The company lastly stated that it is “closely monitoring” the development of COVID-19 around the globe.