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KUALA LUMPUR: Notion VTEC Bhd made a loss in the third quarter as the Covid-19 pandemic disrupted its normal businesses, but the company is hopeful that its venture into manufacturing and sales of three-ply surgical mask to pay off next year.

For the three-month ended June 30, Notion Vtec posted a net loss of RM10.8mil compared with a net profit of RM1.8mil a year ago.

Revenue declined to RM40mil from RM56.4mil previously.

The loss in the third quarter, the company said, was due to insufficient orders and also cost provision of ESOS requirement which it had locked in July of RM1.68mil.

"Orders in April and May were more than 50% down from previous months and fortunately we had some stock to meet orders," Notion Vtec said.

Demand in the hard disc drive (HDD) sector was steady, Notion Vtec said, but the group's automotive and electronics manufacturing services (EMS) were sharply lower.

"There was recovery in June after coming out of full to partial lockdown. We expect the orders from the EMS sector to be strong from fourth quarter onwards," it said.

Meanwhile, the group has started initial production of three-ply surgical mask in early July.
"The learning curve is at times steep but we have reached a confident stage where both three-ply surgical mask and PP meltblown fabric are in production and sales has started," it said.

The initial planned capacities will be completed by September, the company said, while on going certification of these products for different markets are in progress.

"We will expand three-ply and meltblown capacity and include kids mask and N95 respirators," it said.

Notion Vtec expects the new venture into healthcare related business to "impact favorably" in financial year ending Sept 30, 2021 (FY21).

"At this juncture in a better state than at the start of April when the global pandemic played out," it said.

"Although we see challenging times ahead but our options to sustain and expand are much varied and hopeful even if a vaccine or a cure is found."


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