At least 21 SGX-listed firms shut Malaysia operations to comply with restricted movement order
SINGAPORE: At least 21 firms listed on the Singapore Exchange have temporarily shuttered their factories, offices and retail shops in Malaysia to comply with the country’s restricted movement order.
The order, which kicked in on Wednesday (Mar 18) and will last until the end of the month, was aimed at curbing the spread of COVID-19 in the country.
Businesses affected range from manufacturers, miners to developers, according to bourse filings since Tuesday. A majority of them said they are still assessing the financial impact of the temporary halt.
READ: Malaysia bars citizens from going overseas, foreigners from entering country for 2 weeks to curb COVID-19 spread
Those that already foresee some impact include Catalist-listed cleanroom equipment and air-purifier maker Eindec Corp.
As its manufacturing plant in Johor Bahru is the group’s only plant that produces cleanroom equipment and heating, ventilation and air-conditioning equipment, it expects the two-week shutdown to have “material impact” on its half-year financial results ending Jun 30.
Door maker KLW Holdings has also ceased production at its Johor Bahru factory. The closure until the end of March will affect scheduled order shipments to its customers, it said.
The company added that the closure and any extension for a prolonged period could negatively impact its cash flow and financial position as it will still need to pay certain fixed costs, such as wages, during the shutdown.
Apart from temporarily shutting down its offices and sales galleries in Malaysia, Hatten Land said it has also stopped construction works for ongoing projects in the country.
“The order has further exacerbated the already challenging business and operational environment in Malaysia,” the Catalist-listed real estate developer said in a filing on Wednesday.
While it cannot determine the extent of the impact at this stage, the board is issuing a profit guidance note.
“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,” it said.
Dynamic Colours said its wholly owned subsidiary in Malaysia currently operates production facilities for its resin compounding and polyethene packaging business segments.
The closure will “adversely affect” production and delivery plans at the subsidiary during this period, its bourse filing said.
“The company will inform its customers about feasible remedies and timing to resume the performance of our obligations once this force majeure event ceases,” it added.
On the other hand, some businesses have been allowed to continue operations as they fall under the scope of essential services.
Mainboard-listed glove maker Riverstone Holdings told CNA: “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.”
The Malaysian-based firm manufactures nitrile and natural rubber cleanroom gloves that are used in highly controlled environments, as well as premium-nitrile gloves used in the healthcare industry. It also produces finger cots and face masks. Four out of its six manufacturing plants are in Malaysia.
Micro-Mechanics' has also been allowed to continue operating its factory in Penang, which primarily serves customers in Malaysia and accounted for about 16 per cent of total revenue in the six months ended Dec 31 last year.
“As semiconductors are listed on the government’s ‘List of Products that are 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,” it said in a filing on Thursday.
Separately, the company’s factory in the United States is also performing “minimum basic operations” as public health officers within six Bay Area counties in California have announced a legal order for residents to remain at home for three weeks from Mar 17.
This order “limits activity, travel and business functions to only the most essential needs", but its factory in Santa Clara falls under an exemption in the order.
Micro-Mechanics said it has since implemented a plan to ensure the factory “continues to run with reduced personnel to maintain basic and essential operations”.
It added that the reduced operations at both factories are not expected to affect its customers in other markets as they will continue to be served by the group’s factories in Singapore, the Philippines and China.
Still, the company noted that the COVID-19 continues to evolve around the world and it is “closely monitoring” the situation.
Malaysian Prime Minister Muhyiddin Yassin has warned that the country may extend the restricted movement order by “maybe another two weeks or even longer” if the current measures fail to contain the spread of the novel coronavirus.
The country reported 110 new COVID-19 cases on Thursday, taking the total in the country to 900. Of the new cases, 63 are linked to a religious gathering at a mosque in Sri Petaling, Kuala Lumpur.